State explorer Oil India Limited (OIL) has found natural gas in a previously unexplored formation in the shallow Krishna-Godavari Basin, the Indian company said on Friday.
OIL has made the discovery at the Godavari-1 appraisal well in the Matsyapuri formation in the Krishna-Godavari Basin off India’s east coast, recording a peak test flow of 200,000 standard cubic meters per day (SCMD). The company, however, did not reveal an estimate of the potential reserves it had encountered.
OIL is now preparing to test the next zone in the basin for potential further drilling.
India looks to boost domestic oil and gas exploration as the Strait of Hormuz crisis crippled supply and hiked prices for oil and gas for the country, which is the world’s third-largest crude oil importer. The renewed rally in crude oil and LNG prices and the higher freight costs in September started pressuring, again, the marketing margins of India’s oil and gas sector, which has to contend with the fallout of the Iran war on global oil and LNG trade flows.
A senior official at OIL last month said that India needs to boost domestic oil and gas exploration to enhance its energy security amid supply disruptions that drive energy prices higher.
“Disruptions to global supply chains and major energy corridors can have an immediate impact on energy flows, prices and economies worldwide,” OIL’s Director of Finance, Abhijit Majumder, said at an energy industry event in India, as carried by local media.
The Strait of Hormuz crisis is one example of how geopolitical instability in one corner of the world could threaten energy security in all other regions, the executive said.
India’s government has an ambitious plan to boost exploration, following three consecutive years in which domestic crude oil production has declined.
This year, the federal government launched the so-called National Offshore Exploration Scheme, with $8.8 billion in government support through FY 2030–31. The scheme is India’s most ambitious offshore exploration mission to date.
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com
- Renewables Boom Pushes Australia’s Gas Power to Quarter-Century Low
- U.S. Partner in Venezuela Oil Deal Looks to Hike Crude Production
- U.S. Diesel at $6.30 a Gallon as First Russian Cargo Sets Sail for New York