Government raises deepwater gas ceiling to $9.89/MMBtu

The government raised the ceiling for gas from difficult offshore fields to $9.89 per MMBtu, potentially easing costs for producers developing higher‑cost reservoirs.

Reaction pending.

Ceiling covers Oct 1–Mar 31, 2027 Officials said a notification from the Petroleum Planning and Analysis Cell set the new ceiling for deepwater, ultra‑deepwater and high‑pressure, high‑temperature discoveries at $9.89 per MMBtu for the six months beginning Oct. 1, 2026 and ending Mar. 31, 2027. The previous ceiling for such fields was $8.90 per MMBtu, officials said.

Officials said gas produced from legacy fields operated by state oil companies will continue to be capped at $7 per MMBtu under the administered price mechanism. The notification reiterated that gas from technically challenging offshore areas retains marketing and pricing freedom but remains subject to a government‑notified ceiling.

The change covers fields including the KG‑D6 block operated by Reliance Industries and BP, officials said, and could provide some relief to developers where upstream costs are higher than for onshore production. Higher allowed prices improve revenue per unit rather than guaranteeing higher output, officials cautioned.

Markets and project teams will watch monthly production and commercial filings for signals of new investment or faster ramp‑up; the ceiling takes effect on Oct. 1, 2026 and runs until Mar. 31, 2027.