Oil India has made the first-ever natural discovery in the Andaman Sea, which is also the first discovery of any hydrocarbons in the basin. The size of the discovery, containing 87% methane, is yet to be established, but the company’s shares jumped by over 3% following the news.
Oil India had drilled two exploration wells in the shallow-water field it was exploring, and struck gas in the second one, it said in a regulatory filing.
“The discovery is a testament to the capability of Indian exploration efforts—this is the first such reported hydrocarbon occurrence in the ongoing Andaman campaign and could shape future development strategy,” a company spokesman said.
India covers about 50% of its natural gas needs with domestic supply and the rest is imported from the United States, the UAE, and Qatar in liquefied form. This is a rather significant dependence on imports, although not as high as India’s oil dependence, and the country has been seeking ways to reduce it. The government of Narendra Modi has set a target for boosting the use of natural gas for power generation to 15% by 2030. Currently, the share of natural gas in power generation is a mere 6%.
The Andaman Sea basin, Indian media recall, is part of a larger geological system that is believed to be quite rich in hydrocarbons. Discoveries have been made in other parts of that system, off the coasts of Myanmar and Indonesia.
Meanwhile, however, India is planning a boost to its LNG import terminal capacity. By 2030, there should be two more import terminals completed, raising the country’s total capacity by 275 to a total of 66.7 million tons per year, oil minister Hardeel Singh Puri said earlier this month, as quoted by Reuters. The publication noted that India was the fourth-largest gas importer in the world.
By Charles Kennedy for Oilprice.com
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