India’s latest gas discovery in the under-explored Andaman-Nicobar Basin could become a turning point for the country’s domestic upstream production and energy security, according to Rystad Energy. The find confirms the presence of hydrocarbons in a region long regarded as geologically promising but commercially uncertain.

The discovery was made at the Sri Vijayapuram-2 well, operated by Oil India in the Andaman deepwater region, and was announced at the Basin Analysis conference in Mumbai earlier this month. The well is part of a three-well exploration campaign launched last year within Andaman Block AN-OSHP-2018/1, which was awarded under the Open Acreage Licensing Policy (OALP) Bid Round II in 2019. Drilled off the east coast of the Andaman Islands, it reached a water depth of 295 metres and a total depth of 2,650 metres.

Initial production testing between 2,212 and 2,250 metres confirmed the presence of natural gas with intermittent flaring and around 87% methane content. The find underscores growing momentum in India’s offshore exploration efforts, following last year’s dual discoveries by Oil and Natural Gas Corporation (ONGC) — Konark and Utkal — in the Mahanadi Basin off the country’s east coast.

According to Rystad Energy, the Andaman discovery represents a major validation of India’s deepwater exploration potential and could spark new interest in under-explored offshore basins. However, the long-term impact will depend on the size of reserves, development timelines, cost efficiency, environmental management, and alignment with India’s broader energy-transition goals.

The discovery coincides with Prime Minister Narendra Modi’s Samudra Manthan mission — an initiative to explore India’s offshore frontier basins and unlock deepwater oil and gas potential. Despite its geological promise, the Andaman-Nicobar Basin remains one of India’s least explored regions, hindered by high exploration costs, limited data, and technical challenges. The scarcity of high-quality deepwater seismic data has further constrained progress. Only a handful of wells have been drilled across the basin over several decades, reflecting industry caution in the absence of proven success and sustained campaigns.

The confirmation of hydrocarbons at Sri Vijayapuram-2 could change that narrative. It validates the region’s potential and may spur further exploration drilling, infrastructure development, and renewed investor confidence. The basin could eventually see the emergence of new offshore platforms, pipelines, and possibly floating liquefied natural gas (LNG) facilities, enabling it to contribute meaningfully to India’s domestic gas supply. Yet, the commercial viability of the field will depend on the scale of recoverable reserves and the economics of production.

As domestic gas output continues to decline, discoveries such as this are becoming vital to India’s energy strategy. They promise enhanced energy security, reduced import dependency, and support for a low-carbon transition. Natural gas, as a relatively cleaner fossil fuel, plays a critical role in India’s efforts to move away from coal in power generation and industrial use. At the same time, expanding deepwater exploration could attract fresh investments, technological collaboration, and innovation in subsea infrastructure.

Deepwater operations, however, remain capital-intensive and technologically demanding. Sustained participation from NOCs such as ONGC and Oil India will be essential to draw international oil companies (IOCs) with advanced exploration and production capabilities. The Andaman discovery is now expected to trigger more high-quality 3D seismic surveys and drilling campaigns, not only in the Andaman-Nicobar Basin but also in other deepwater frontiers such as Mahanadi, Krishna-Godavari, and Saurashtra.

Rystad Energy noted that if India successfully builds on the momentum from this discovery, it could reposition itself as a more attractive deepwater investment destination, particularly for IOCs seeking growth opportunities in stable, emerging markets.

Environmental considerations will also be critical. Deepwater projects in the Andaman-Nicobar region will need to balance exploration activity with marine ecosystem protection and emission management. Proper oversight will be key to ensuring that development aligns with India’s sustainability commitments.

Beyond adding to India’s energy supply, the Andaman gas find offers strategic advantages — strengthening the country’s negotiating position in global energy markets, ensuring feedstock security for industries, and underpinning stable, sustainable economic growth.

Growing collaboration between NOCs and global energy majors is further shaping India’s exploration landscape. In July 2025, ONGC signed a memorandum of understanding with BP to jointly drill stratigraphic wells across the Andaman, Mahanadi, Saurashtra, and Bengal basins. The partnership aims to enhance geological understanding and unlock untapped reserves. Such initiatives could pave the way for greater foreign participation and investment.

However, attracting sustained IOC engagement in India’s frontier basins will require more than geological success. The government will need to continue improving transparency, regulatory clarity, and data accessibility. Until then, NOCs will remain at the centre of India’s hydrocarbon development efforts, serving as both pioneers and partners in the country’s pursuit of long-term energy self-reliance, Rystad Energy added.