Oil India Flows Gas at 200,000 scm/d in KG Basin Discovery Well

By Olivia Hart

Oil India has flowed natural gas at rates up to 200,000 standard cubic metres per day from the Godavari-1 appraisal well in the Krishna-Godavari (KG) Basin, the state-owned upstream company reported. The discovery sits in shallow offshore block KG-DSF/GSKW/2018 and marks the first hydrocarbon confirmation in the previously unappraised Matsyapuri formation.

The zone tested between 2,024 and 2,027 metres. Production testing began on 16 October 2026 and ran continuously to surface at the stated rate. The same test yielded condensate (light liquid hydrocarbons produced with gas) at approximately 170 barrels of oil per day. Wellhead pressure held at 1,815 psi. Oil India operates the block with 100% equity.

The takeaway: a gas plus condensate flow from a single unappraised zone is a firm data point, but it remains appraisal-stage until higher zones are tested and resources are booked.

What comes next for the well?

The company is preparing to test additional, deeper zones within the same wellbore. Oil India has not disclosed a timeline for those tests or any reserve estimates for the Matsyapuri formation. The watch item is whether subsequent zone tests sustain flow rates near the initial 200,000 scm/d figure, which would determine whether the block advances toward development planning.

The wider exploration portfolio

Earlier in the same month, Oil India signed a revenue sharing contract for the special coal bed methane (CBM, natural gas adsorbed in coal seams) Block SR-ONHP-(CBM)-2026/1 in the Singrauli Coalfield of Madhya Pradesh. The block covers 272.14 square kilometres and targets coal seams at depths of 600 to 800 metres with an average thickness of around 40 metres.

The CBM signing and the KG offshore find together show the company pursuing both conventional offshore gas and unconventional onshore gas under one portfolio strategy.

FY 2025-26 results: production and reserves

Oil India disclosed its annual performance figures at its recent annual meeting:

• Crude oil production: 3.45 million metric tonnes for FY 2025-26
• Natural gas output: 3.186 billion cubic metres
• Crude oil terminal production rate: 10,566 metric tonnes per day, the highest in fourteen years
• Wells drilled: 74 during the period
• Reserve Replacement Ratio (reserves added divided by production) of 1.02, indicating additions slightly exceeded output
• Q1 FY27 quarterly crude output up 11% year-on-year

A reserve replacement ratio above 1.0 means the company grew its reserve base while producing, a metric investors track as a proxy for exploration performance.

Financials and policy alignment

Consolidated profit after tax for FY 2025-26 came in at Rs 75.51 billion ($795.16 million). Consolidated net worth stood at Rs 537.16 billion.

The company states that it continues to align its offshore exploration and clean energy initiatives with national policy schemes, with a stated target of Net Zero emissions by 2040.

Government backing: Samudra Manthan

In July 2026, the Indian government sanctioned the National Offshore Exploration Scheme, known as Samudra Manthan, with a total budget allocation of Rs 840.84 billion covering the period through financial year 2030-31. The scheme frames the policy backdrop against which Oil India's offshore drilling in the KG Basin proceeds.

The watch item: results from the higher-zone tests at Godavari-1, which will determine whether the Matsyapuri discovery moves from appraisal to a sanctioned development.