India's east coast is emerging as one of the hydrocarbon hotspots in the world with 100 trillion cubic feet of gas and two billion barrels of oil in place.
The two main basins in the area -- Krishna-Godavari and Mahanadi -- have shown a potential of nearly 18 billion barrels of oil equivalent gas in place.
Recently, oil and gas discoveries in the southernmost basin in the area, the Kaveri basin, have been announced by Hardy Oil, a Canadian oil exploration company, while Oil and Natural Gas Corporation and Bharat Petroleum Corporation have chalked out extensive plans to begin drilling in the Kaveri basin.
While official sources quote a figure of 100 tcf for gas reserves in the region, unofficial estimates peg the reserves at 200 TCF. This, says a report by equity brokerage house CLSA, could put India in the league of top 10 natural gas producers in the world.
And these are just the finds from the pre- and early NELP (new exploration licensing policy) blocks. The big gas and oil finds in the region could well be in the ultra deep-water blocks that are just being put on the block by the Director General of Hydrocarbons, India's upstream regulator.
In the last round of NELP, the DGH had put up 24 deep-water blocks for bidding. NELP VII is likely to see more deep-water blocks put up for bidding, sources in the DGH say.
"These are ancient river systems that have been depositing sediments here for a long time. But as the basins are shallow, most sediments, and therefore hydrocarbons, would have found their way into the deep and ultra deep waters (below 400 meters depth). That is where the real potential of the region lies," said an industry analyst.
"Oil companies like Cairn, ONGC, Gujarat State Petroleum Corporation and Reliance Industries have found good working petroleum systems -- reservoir and source rocks that promise great discoveries in the coming years," he said.
Added Richard Heaton, director, exploration at Cairn India, "We were the first to find oil and gas in the deepwaters off KG and have always been upbeat on the area."
Cairn India continues to own a 10 per cent stake in the KG-DWN-98/2 block in which it farmed out to ONGC. It is from this block that ONGC's recent oil and gas discoveries have been reported.
Said Yogesh Garg, CEO of Infraline Energy, "The Indian east coast could become the Mecca for oil companies in India in the coming years. Not only do you have abundant supply of gas and possibly oil, you also have a complete set of infrastructure coming up as well as a whole lot of end-users for the gas."
Garg's reference is to the 10,000 hectare Petrochemicals and Petroleum Investment Region that is being developed by the government of Andhra Pradesh. ONGC is putting up the anchor petrochemical facility in the special investment region. The state government is in the process of identifying land for the PCPIR."The region could end up supplying gas to all of the southern, western and northern India," said Garg.