Oil India Discovers Natural Gas in Krishna-Godavari Basin, Records Peak Flow of 2 Lakh Cubic Metres Per Day

Maharatna public sector undertaking Oil India Limited (OIL) has announced a natural gas discovery in the shallow offshore waters of the Krishna-Godavari Basin along India’s eastern coast. The discovery was made in the previously unappraised Matsyapuri geological formation, where production testing recorded a peak natural gas flow of 2 lakh standard cubic metres per day.

The development marks an important milestone in Oil India’s offshore hydrocarbon exploration activities. Announcing the discovery on 23 October 2026, the company confirmed that the Godavari-1 appraisal well had successfully brought natural gas to the surface during testing. The well also produced hydrocarbon condensate, providing additional geological information about the formation.

Natural Gas Discovered in Godavari-1 Appraisal Well

The discovery was made in the KG-DSF/GSKW/2018 offshore block, which was awarded to Oil India under the government’s Discovered Small Field (DSF) bidding process. Oil India operates the block independently and is responsible for conducting exploration, appraisal and subsequent development activities.

The Godavari-1 well was drilled to evaluate the hydrocarbon potential of geological formations within the block. During the investigation, the company identified hydrocarbons in a selected productive interval at a depth of 2,024 to 2,027 metres.

The gas-bearing interval belongs to the Matsyapuri formation, which Oil India described as previously unappraised for hydrocarbons. The discovery establishes the presence of natural gas within the tested section and provides valuable information for assessing other potentially productive zones in the formation.

Production Testing Records Peak Flow of 2 Lakh Cubic Metres Per Day

Oil India commenced production testing of the identified hydrocarbon-bearing zone on 16 October 2026. The initial testing produced natural gas at approximately 1 lakh standard cubic metres per day, demonstrating that hydrocarbons could flow from the reservoir to the surface.

During continuous testing, the well achieved a maximum natural gas flow of 2 lakh standard cubic metres per day. The recorded flow provides an important indication of the tested reservoir interval’s ability to deliver gas under the prevailing well conditions.

The company also reported condensate production of approximately 170 barrels per day, with an API gravity of 55.8 degrees measured at 60°F. Condensate is a light liquid hydrocarbon associated with certain natural gas reservoirs and can provide an additional recoverable product during commercial development.

The well recorded a wellhead pressure of 1,815 pounds per square inch during testing. Together, the observed gas flow, condensate production and pressure measurements provide technical data that will support the evaluation of the reservoir’s production characteristics.

Further Hydrocarbon Testing Planned in the Matsyapuri Formation

Following the successful testing of the initial gas-bearing interval, Oil India has begun preparations to evaluate the next higher zone in the Godavari-1 well. The additional testing will help determine whether other identified intervals contain commercially significant hydrocarbons.

Appraisal activities are an essential stage in offshore oil and gas development. Although an initial discovery confirms the presence of hydrocarbons, further geological evaluation and reservoir testing are necessary to understand their distribution, recoverable volumes and production characteristics.

The information gathered from Godavari-1 will help Oil India assess the formation and identify appropriate next steps for evaluating the offshore block. The recorded peak flow represents a test result rather than an established sustained commercial production rate.

Krishna-Godavari Basin Remains Important for India’s Hydrocarbon Exploration

The Krishna-Godavari Basin is one of India’s important sedimentary basins for petroleum exploration and production. Located along the eastern coast, the basin extends across onshore and offshore geological areas associated with the Krishna and Godavari river systems.

The region contains hydrocarbon-bearing formations at varying geological depths, making it an important area for natural gas exploration. Both public and private sector companies have undertaken extensive exploration and development activities in the basin over several decades.

Although the basin is widely associated with major deepwater gas developments, its shallow offshore areas also offer opportunities for identifying and evaluating hydrocarbon resources. The Godavari-1 discovery illustrates the continuing potential for exploration within geological formations that have received comparatively limited appraisal.

For Oil India, the discovery adds to its efforts to expand exploration activities beyond its traditional operating regions. The company has historically maintained a strong upstream presence in northeastern India while gradually developing a wider portfolio of domestic and international hydrocarbon assets.

Discovered Small Field Policy Supports Domestic Energy Exploration

The offshore block containing the Godavari-1 well was awarded under India’s Discovered Small Field policy, an initiative designed to encourage the development of hydrocarbon discoveries and smaller petroleum fields.

The policy seeks to bring identified hydrocarbon resources into productive use by enabling companies to undertake exploration, appraisal and development within awarded contract areas. It provides opportunities for public and private sector operators to evaluate fields that may require specialised development approaches.

Oil India’s work in the KG-DSF/GSKW/2018 block demonstrates the role of such opportunities in extending hydrocarbon exploration into additional areas. By assessing previously unappraised geological intervals, operators can improve understanding of the country’s domestic petroleum potential.

The latest discovery also contributes geological and reservoir information that can support future exploration planning in the Krishna-Godavari region.

Domestic Natural Gas Exploration Strengthens India’s Energy Security

Natural gas occupies an important position in India’s energy system, supporting fertiliser production, industrial manufacturing, electricity generation, city gas distribution and transportation.

Domestic gas discoveries are particularly relevant as India continues to import liquefied natural gas to supplement indigenous production. Increasing the availability of domestic resources can strengthen supply security and reduce exposure to international energy market fluctuations.

The Government of India has set an objective of increasing the share of natural gas in the country’s primary energy mix to 15% by 2030. Exploration and development of indigenous gas resources form an important part of the broader effort to expand gas availability across different sectors of the economy.

Discoveries such as Godavari-1 contribute to this objective by identifying additional hydrocarbon-bearing formations that can undergo further evaluation. Commercial development decisions will depend on the results of appraisal activities, reservoir assessments and the technical and economic feasibility of production.

Oil India Advances Offshore Exploration with New Gas Discovery

The natural gas discovery in the Matsyapuri formation marks another achievement in Oil India’s hydrocarbon exploration programme. Successful testing at Godavari-1 has established the presence of natural gas and condensate in the selected reservoir interval while generating important technical information for further appraisal.

The next phase of testing will provide additional insight into the hydrocarbon potential of the offshore block. Continued exploration across India’s sedimentary basins will strengthen the country’s geological knowledge and support the identification of resources available for future development.

Through its growing offshore exploration activities, Oil India continues to contribute to India’s efforts to expand indigenous energy resources, build domestic production capabilities and strengthen long-term energy security.

---

References

1. Oil India Limited: Press Release, 23 October 2026 — Discovery of Natural Gas in the Shallow Offshore Block KG-DSF/GSKW/2018 of Krishna Godavari Basin by Oil India Limited. Submitted to NSE and BSE under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
2. Oil India Limited: Official website — https://www.oilindia.com/
3. Ministry of Petroleum and Natural Gas: Discovered Small Field Policy and India’s domestic hydrocarbon exploration framework.
4. Directorate General of Hydrocarbons: Geological information and hydrocarbon exploration activities in the Krishna-Godavari Basin.

---