Godavari-1 flowed gas at about 1 lakh SCMD, peaking near 2 lakh SCMD, from 2,024 to 2,027 metres and a higher zone is next.
NEW DELHI: Oil India Limited has found natural gas in the shallow offshore Krishna-Godavari (KG) Basin, in a formation that had not been appraised before. The Godavari-1 well sits in block KG-DSF/GSKW/2018, where Oil India holds 100% and operates. It flowed gas at about 1 lakh standard cubic metres a day (SCMD) and peaked near 2 lakh SCMD, along with light condensate. The company disclosed the result to the stock exchanges on 23 October, and its rig is already being readied to test a shallower zone in the same well.
From Assam’s Oilfields to the Bay of Bengal
The Maharatna company built its business in Upper Assam, around Duliajan, Moran and Baghjan. Those mature fields decline naturally, so Oil India has shifted capital towards frontier offshore acreage. It has already had gas encounters in the Andaman offshore basin, and it has an agreement with TotalEnergies on complex offshore operations.
The numbers behind the push are healthy. In FY26, it produced 3.450 million tonnes of crude and 3.186 billion cubic metres of gas, and its exit rate of 10,566 tonnes a day was the highest in 14 years. The reserve replacement ratio rose to 1.02 from 0.94, and the company drilled 74 wells with 28 rigs, three of them offshore. Standalone profit reached ₹4,455 crore, consolidated profit ₹7,551 crore and debt to equity just 0.27 times. That is ample capacity to fund shallow-water appraisal.
From a Test Flow to a Booked Reserve
The tested interval lies between 2,024 and 2,027 metres in the Matsyapuri formation, and testing began on 16 October. Condensate came at about 170 barrels a day, with a gravity of 55.8° API, at a wellhead pressure of 1,815 psi, and some water also appeared. These readings show that the reservoir can deliver.
They are not reserves, however. Oil India has given no estimate of recoverable gas and has not declared commerciality. The next steps are multi-zone testing, appraisal wells and 3D seismic work. A Declaration of Commerciality to the Directorate General of Hydrocarbons follows, then a Field Development Plan. Appraisal must also show how far the reservoir extends and whether it is compartmentalised. Gas quality, meaning methane purity and any carbon dioxide or hydrogen sulphide, needs checking, and so does the stability of the condensate-to-gas ratio.
From Shallow Water to the Shore
The block’s setting helps. The KG shelf, with water up to 400 metres deep, allows fixed jacket platforms or jack-up-supported units, and drilling costs per metre run well below deepwater. Schedules are shorter than for subsea developments. Gas could reach landfall terminals at Odalarevu, Mallavaram or Kakinada through short subsea tie-ins. From there, it can enter the 1,400 km East-West Pipeline and the GAIL and GSPL networks.
As general benchmarks, shallow gas finds within 15 to 30 km of pipelines usually take three to five years from commerciality to first gas. A single-platform field with two to four wells typically needs $150 million to $300 million. Those are industry norms and not Oil India’s plan. Notably, the Discovered Small Field framework gives operators freedom on marketing and pricing, with sales through transparent electronic bidding. The Samudra Manthan scheme adds risk sharing for offshore drilling.
From One Well to a National Gas Balance
India imports 52% to 54.5% of the gas it consumes as LNG, which exposes buyers to volatile spot prices. Domestic output is about 33.5 to 35 billion cubic metres a year, against consumption of roughly 170 to 190 million cubic metres a day. The government wants gas to reach 15% of the primary energy mix by 2030, up from about 6%.
One well’s peak of 0.2 million cubic metres a day is small against that demand. Even so, discoveries like this add up, and shallow finds can be monetised faster than deepwater ones. Fertiliser makers, which take 28% to 30% of supply, and city gas distributors, which take 24% to 26%, are the priority buyers for domestic gas.
From Here, the Signals to Watch
The next flow tests in the shallower zone will show rates and fluid make-up. Further stock exchange filings should reveal the appraisal schedule, and DGH decisions on commerciality and the development plan will follow. Oil India must also choose between a standalone platform and shared infrastructure, while the monthly output data from the petroleum ministry and its analysis cell will show how the picture develops.
Encouragingly, a state-owned explorer with a strong balance sheet has opened a new section of a proven basin close to existing pipelines. Ultimately, the second zone’s results and the first appraisal well will show how far the Matsyapuri formation runs.
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