Oil India strikes new gas zone in Rajasthan's Dandewala field
Synopsis
Oil India has tapped a previously untouched geological layer — the Sanu Formation — in Rajasthan's Dandewala field, with gas flowing at 25,000 standard cubic metres per day. Coming alongside a 76 per cent sequential profit jump in Q4 FY26, the discovery reinforces Oil India's position as a key player in India's push for domestic energy self-sufficiency.
Key Takeaways
Oil India Limited has unlocked a new gas-bearing pay zone in Rajasthan's Dandewala field , announced on 23 May 2025 .
Gas is flowing for the first time from the Sanu Formation at nearly 25,000 standard cubic metres per day .
Union Minister Hardeep Singh Puri called it a 'new chapter' in India's domestic energy production efforts.
Oil India posted a 76 per cent sequential rise in net profit for Q4 FY26 , with revenue up 10 per cent to ₹10,013 crore .
EBITDA margin improved to 32.8 per cent from 27.5 per cent in the preceding quarter.
Oil India shares have surged more than 450 per cent over the past five years .
Maharatna PSU Oil India Limited has unlocked a new gas-bearing pay zone in Rajasthan's Dandewala field, Union Petroleum and Natural Gas Minister Hardeep Singh Puri announced on Saturday, 23 May. Natural gas has begun flowing for the first time from the shallower Sanu Formation at nearly 25,000 standard cubic metres per day, marking a significant milestone in India's domestic energy push.
The Discovery and What It Means
The Sanu Formation, a shallower geological layer within the Dandewala field, had not previously yielded gas flow. Its successful unlocking adds a new productive horizon to an established field — a development that energy analysts note can be more cost-effective than greenfield exploration. Puri described it as 'a new chapter in India's quest to strengthen domestic production of energy' in the context of the country's broader energy self-sufficiency goals.
The minister credited Oil India Limited's 'perseverance, technological excellence and commitment' for achieving the breakthrough, posting his remarks on social media platform X.
Energy Security Context
The discovery comes as India continues to prioritise boosting domestic exploration and production to reduce dependence on imported hydrocarbons. The country remains one of the world's largest energy importers, and incremental domestic finds — even at relatively modest initial flow rates — contribute to the government's long-term energy security calculus. This development aligns with the Centre's stated push under Prime Minister Narendra Modi toward greater energy self-reliance.
Notably, Rajasthan has emerged as an increasingly important basin for domestic hydrocarbon production, with multiple operators active in the region. The Dandewala field's new pay zone adds to that profile.
Oil India's Financial Performance
Oil India Limited separately reported a 76 per cent sequential jump in net profit for the fourth quarter of FY26. Revenue for the quarter rose 10 per cent to ₹10,013 crore compared to the preceding quarter, while EBITDA climbed 31 per cent to ₹3,281 crore from ₹2,510 crore. The EBITDA margin improved to 32.8 per cent, up from 27.5 per cent in the previous quarter.
Stock Performance
Shares of Oil India closed marginally lower at ₹500.45 per share on the National Stock Exchange (NSE) on Friday. However, the stock has delivered strong medium-to-long-term returns — rising approximately 20 per cent over both the past six months and the past one year. Over a five-year horizon, the PSU scrip has surged more than 450 per cent.
With the Dandewala gas zone now producing and quarterly financials pointing upward, Oil India's operational and investor narrative is set to remain closely watched in the months ahead.
Point of View
000 standard cubic metres per day is modest by international standards, but the strategic signal matters more than the volume. Unlocking a shallower formation within an existing field suggests Oil India is sweating its acreage more efficiently — a discipline that state-run explorers have historically struggled with. The timing, alongside a strong Q4 FY26 print, gives the government a convenient dual narrative: operational progress and financial health. The harder question is whether discoveries of this scale can meaningfully move India's import dependency needle, or whether they remain symbolically important but structurally insufficient without larger basin-level finds.
NationPress
10 Aug 2026
Frequently Asked Questions
What has Oil India discovered in Rajasthan's Dandewala field?
Oil India Limited has unlocked a new gas-bearing pay zone within the Sanu Formation at the Dandewala field in Rajasthan, with natural gas flowing for the first time at nearly 25,000 standard cubic metres per day. The discovery was announced by Union Minister Hardeep Singh Puri on 23 May 2025.
What is the Sanu Formation and why is this discovery significant?
The Sanu Formation is a shallower geological layer within the Dandewala field that had not previously yielded gas flow. Its successful unlocking adds a new productive horizon to an established field, which is typically more cost-effective than greenfield exploration and contributes to India's domestic energy security goals.
How did Oil India perform financially in Q4 FY26?
Oil India reported a 76 per cent sequential jump in net profit for Q4 FY26. Revenue rose 10 per cent to ₹10,013 crore quarter-on-quarter, while EBITDA climbed 31 per cent to ₹3,281 crore and the EBITDA margin improved to 32.8 per cent from 27.5 per cent.
How has Oil India's stock performed recently?
Oil India shares closed at ₹500.45 on the NSE on Friday, marginally lower on the day. Over six months and one year, the stock has risen around 20 per cent, and over five years it has surged more than 450 per cent.
How does this discovery fit into India's energy policy?
The Centre has prioritised boosting domestic exploration and production to reduce India's dependence on imported hydrocarbons. The Dandewala gas find aligns with that agenda, adding incremental domestic supply and reinforcing Rajasthan's growing importance as a hydrocarbon-producing basin.
