Oil Reserves In Andaman: India's Energy Bridge To ASEAN?

India is rapidly transforming the territory of Andaman & Nicobar into a strategic energy frontier, aiming to unlock deep-water oil and gas reserves that could curb its heavy reliance on imports. As explained in this report, ONGC has resumed drilling in previously untapped offshore blocks under the latest OALP round. This exercise is part of a push to bolster energy security whilst supporting cleaner fuel exports.

With Association of South East Asian (ASEAN) nations moving away from coal towards Liquefied Natural Gas (LNG) and hydrogen, India's exploration efforts are not just domestically significant but position it as a trusted energy partner for Southeast Asia and reinforce its Act East ambitions.

Andaman Reserves: India's Gateway to ASEAN Energy Dominance

India is poised for a major oil discovery in the Andaman Sea, laying precedents through policies like the "IndraSastra" mission in 1980 and the Open Acreage Licensing Policy (OALP) launched in 2016 under Hydrocarbon Exploration and Licensing Policy (HELP). These policies led to finds like Surya Mani and Neel Mani.

Early drilling in the Port Blair Formation's Miocene sections has already brought forth natural gas, with the AN-1-1 yielding 180,000 cubic metres per day in 1980 itself. The Union Petroleum and Natural Gas Minister, comparing this to Guyana's success, projects potential reserves of 1,84,440 crore litres of crude oil, which would significantly reduce India's 80% oil and 50% natural gas import reliance. He also questioned why such promising exploration was delayed.

India can become a critical energy bridge for a coal-divesting ASEAN region by leveraging its offshore reserves in the Andaman & Nicobar Basin. With ongoing exploratory efforts pointing to potentially vast oil and gas deposits, India can use emerging LNG infrastructure such as Campbell Bay to channel cleaner energy directly to Southeast Asia. This not only supports ASEAN's energy diversification but also reinforces India's regional integration and Act East policy ambitions.

It should be mentioned that the ASEAN region's approach to energy diversification is related to its economic changes following the COVID pandemic. The COVID-19 pandemic led to about a 3% drop in ASEAN's GDP in 2020. After falling by 7.6% in 2020 and 0.2% in 2021, ASEAN's energy consumption surged by 15.2% in 2022, reaching 432 million tonnes of oil equivalent.

This significant increase was primarily driven by positive GDP growth experienced in 2022, bringing demand back above pre-pandemic levels. ASEAN's energy demand has been on the rise recently, with coal seeing the largest jump in 2022, increasing by 80.5% from the previous year. Oil followed with the second-highest growth at 10.6% in 2022, reaching 182 million tonnes of oil equivalent as crude oil consumption in ASEAN nations continued its gradual ascent.

In 2023, most ASEAN nations continued to import natural gas, as the region's net exports fell by 13% from 2022. This represents a significant 66% drop since 2019, which was the peak year for net natural gas exports in the last five years. Based on the ASEAN Centre of Energy's analysis in the 8th ASEAN Energy Outlook, the baseline scenario predicts that ASEAN will become a net importer of natural gas by 2027.

In 2023, the Thai Government primarily imported natural gas, with gaseous imports mainly from Myanmar totalling over 2 billion dollars and LNG from Australia, Qatar, Malaysia exceeding 8.3 billion dollars. Thailand's natural gas exports were significantly lower, at just over 1,000 dollars for LNG and 3,700 dollars for gaseous form.

In the same year, Vietnam primarily imported natural gas of 30.77 million dollars, purchasing 61.87 million kg of Liquefied Natural Gas mainly from Indonesia and 415.98 million dollars buying 626.77 million kg of other Gaseous Hydrocarbons from China, Brunei and Malaysia. Exports were minimal, with only 12,000 dollars of natural gas sent to Malaysia.

From Andaman to ASEAN: India's Strategic Energy Surge

South-East Asia is projected to account for 25% of global energy demand growth, increasing by 35% by the year 2035. India is advancing plans for an LNG pipeline linking Myanmar and Bangladesh to its Northeast Gas Grid via Tripura. With stakes in Myanmar's offshore gas fields, Indian firms like ONGC Videsh and GAIL can use existing infrastructure such as Pipeco to supply gas westward into India and eastward to ASEAN.

The PNGRB's 2025 notice on LNG infrastructure in the Andaman & Nicobar Islands, especially Campbell Bay, marks a strategic move to position India as a key LNG exporter. By developing these ports, India can meet ASEAN's rising energy demand and emerge as a prime regional supplier.

Countries such as Vietnam, Indonesia, and the Philippines are beginning to pivot away from coal due to mounting environmental pressures, increasing carbon pricing mechanisms, and a collective push for energy diversification. LNG is now being positioned as a key transitional fuel, whilst hydrogen is entering national strategies and pilot-stage deployments across the region.

According to ERIA's 2013 study on ASEAN–India energy cooperation, Myanmar is pivotal for India's energy outreach. The report suggests that India "can possibly get connected" to both the ASEAN Power Grid (APG) and the Trans-ASEAN Gas Pipeline (TAGP) by developing gas pipeline linkages through Myanmar. This explicitly includes access to existing offshore gas flows such as from the Shwe system, thus enabling India to channel Myanmar gas into broader ASEAN energy architectures.

Powering Diplomacy: India's Rise as ASEAN's Energy Partner

By synergising offshore reserves from the Andaman Basin and Myanmar's A‑1/A‑3 blocks, India gains crucial strategic depth in the Bay of Bengal, positioning itself as an emerging energy node for Southeast Asia. As ASEAN's energy demand is projected to triple by 2050, India can act as the region's "energy bridge" through transshipment and LNG pipeline corridors.

Tapping into Myanmar's Shwe pipeline system also allows India to counterbalance China's energy influence in the region, whilst securing its Act East objectives through energy-led regional diplomacy. This gives an overall leverage for India in the future to gain access over Myanmar's offshore.

Simultaneously, India witnesses the largest increase in energy demand of any country across all current scenarios, recording the highest absolute growth globally. As India balances internal needs with regional ambitions, tapping offshore reserves like the Andaman Basin becomes critical not only for ensuring energy security at home but also for powering its strategic energy diplomacy with ASEAN.