Critically evaluate the risk-sharing model (cost-sharing in drilling) adopted in offshore exploration schemes as a tool to attract private investment in high-capital sectors.

A single deepwater exploratory well costs USD 125–150 million with no guarantee of a discovery. The Samudra Manthan scheme (Central Sector, ₹84,084 crore up to FY 2030–31) therefore offers up to 50% of eligible drilling cost or ₹675 crore per well, whichever is lower [1]. Such cost-sharing is a powerful de-risking tool, but its success depends on design safeguards.

Merits as an instrument of investment mobilisation

• Corrects market failure: exploration is a high-risk, lumpy investment where private capital under-invests; part-funding the dry-hole risk makes deepwater acreage bankable [1].
• Leverage effect: government pays at most half, so ₹43,200 crore for 60 deepwater/ultra-deepwater wells crowds in an equal or larger private share [1].
• Capped and conditional: the ₹675 crore ceiling limits fiscal exposure per well and preserves investor incentive to control cost [1].
• Ecosystem spillovers: paired with shared production/evacuation infrastructure and an Oil & Gas Manufacturing and Services Zone, it builds Make in India capability, not just wells [2].
• Strategic payoff: cuts exposure to crude price shocks, seen during recent West Asia disruptions that forced excise and export-levy interventions [3].

Limitations that temper the verdict

• Moral hazard: subsidising input cost rewards drilling activity, not discovery; firms may drill low-prospectivity blocks.
• Fiscal risk without upside sharing: the state absorbs losses while gains accrue largely to the operator unless royalty/profit-share claw-backs are tight.
• Capability, not capital, may bind: rig availability, ultra-deepwater technology up to 3,000 m and skilled manpower are physical constraints money alone cannot relax [1].
• Execution risk: outcomes hinge on timely clearances, seismic data quality and evacuation infrastructure; Phase-I targets are ambitious against a modest discovery base.

On balance, cost-sharing is a sound risk-transfer, not a subsidy, provided it is paired with transparent data disclosure, performance-linked disbursal and claw-back on commercial success. Anchored to reserve accretion of over 600 MMTOE [1], it can convert energy vulnerability into self-reliance — a template extendable to other high-capital frontier sectors.