Daijiworld Media Network - New Delhi
New Delhi, Jun 6: State-owned Oil India Limited has reported the presence of natural gas in its third exploratory well in the Andaman offshore basin, boosting prospects of the region emerging as a significant hydrocarbon-producing area for the country.
In a stock exchange filing on Friday, the company said natural gas was encountered in the Vijayapuram-3 exploratory well located in the Andaman Shallow Offshore Block AN-OSHP-2018/1. The discovery marks the second hydrocarbon find from Oil India's ongoing exploration campaign in the block.
According to the company, preliminary assessment of the well indicates hydrocarbon accumulation potential, providing fresh momentum for future exploration activities in the region.
The development comes as India seeks to reduce its dependence on imported crude oil and natural gas by enhancing domestic energy production.
The Vijayapuram-3 well is situated around 15 km off the east coast of the Andaman Islands and was drilled at a water depth of 355 metres under the Open Acreage Licensing Policy (OALP).
Oil India said initial production testing in the Eocene formation at a depth of more than 1,900 metres confirmed the presence of natural gas through continuous flaring. The well reportedly showed immediate pressure build-up after perforation and began producing gas, indicating the existence of an active hydrocarbon system.
The company is currently conducting gas sampling to determine the composition and calorific value of the gas, while isotope studies are underway to establish its origin.
Although commercial viability is yet to be confirmed, the discovery is considered significant as it strengthens evidence of hydrocarbon presence in the Andaman offshore basin.
According to Oil India, the findings suggest the existence of hydrocarbon source systems, migration pathways and accumulations in the prospect area, indicating favourable geological conditions for future oil and gas discoveries.
The latest find follows the discovery of natural gas in the Vijayapuram-2 exploratory well, reported in September 2025. With hydrocarbons now encountered in two of the three exploratory wells drilled in the block, confidence in the basin's resource potential has increased.
Following the earlier discovery, the company launched an appraisal programme to better assess the block's resource potential. It reprocessed existing 2D seismic data and acquired an additional 600 sq km of 3D seismic data in the area.
Processing and interpretation of the seismic data are currently underway. Once completed, the company is expected to begin appraisal drilling to determine the size, quality and commercial viability of the reserves.
The Andaman offshore basin has attracted increasing attention in recent years because of its geological similarities to several hydrocarbon-rich regions in Southeast Asia. Policymakers and energy companies view the basin as a promising frontier for future oil and gas exploration.
While discoveries alone do not guarantee commercial production, repeated hydrocarbon encounters significantly improve confidence in the basin's long-term energy potential.
Oil India said it would continue to update stakeholders as exploration activities progress in the Andaman offshore basin.
Shares of Oil India ended nearly flat at Rs 488.95 on Friday, although the stock has gained more than 14 per cent so far this year.