AP clears Vedanta’s onshore drilling plan, balancing energy push with water safeguards
CHENNAI: The Andhra Pradesh government has issued a conditional no-objection certificate to Vedanta Ltd, allowing the company to drill 20 onshore oil and gas wells in Krishna district, marking a significant step in expanding private participation in domestic hydrocarbon production while underscoring the state’s cautious approach to protecting water resources and irrigation infrastructure.
According to reports, the approval has been granted to Vedanta’s Cairn Oil and Gas division under India’s Discovered Small Field policy. The company had sought permission to drill a larger number of wells across several locations in the region, but the state government cleared only 20 sites after scrutiny by the irrigation authorities. Officials examined the potential impact of drilling activity on canals and other water systems, particularly because parts of the proposed exploration block intersect with the Bandar Canal and the wider Krishna delta irrigation network.
The no-objection certificate comes with stringent conditions. The state has made it clear that Vedanta will not be allowed to draw water from canals, reservoirs, ponds or other surface water bodies linked to the irrigation system. The permission is also limited in scope and does not replace other statutory approvals that the company must obtain before starting drilling operations. Clearances related to the environment, pollution control and land use will still be required, and compliance with these conditions will be closely monitored.
From a policy perspective, the decision reflects the balancing act faced by state governments as India pushes to increase domestic oil and gas production to reduce reliance on imports, says an industry expert. "Onshore fields developed under the Discovered Small Field framework are seen as quicker to bring into production and less capital-intensive than large offshore projects. Vedanta, one of the country’s largest private oil and gas producers, has positioned these smaller blocks as central to its strategy of boosting output and contributing to national energy security," he says.
However, some analysists warn that the cautious nature of the approval highlights local sensitivities in agriculturally rich regions such as the Krishna delta, where water availability is critical to livelihoods. Past opposition to industrial and energy projects in similar areas has often centred on fears of groundwater contamination and disruption to irrigation flows. By restricting water usage and limiting the number of approved drilling locations, the Andhra Pradesh government appears intent on signalling that energy development will not come at the cost of irrigation security, they say.
For Vedanta, the clearance provides an operational foothold but not a free hand. The company’s ability to proceed smoothly will depend on how effectively it navigates the remaining regulatory process and engages with local stakeholders. Any perception of environmental risk or violation of conditions could invite resistance or delays, especially in a region where agriculture remains politically and economically sensitive, adds the industry expert.