State-run Oil and Natural Gas Corp (ONGC) said on Sunday it had discovered gas in a deep-water exploration block in the Bay of Bengal.
The find was in the Krishna-Godavari basin, where Reliance Industries found an estimated 14 trillion cubic feet of gas in 2002.
ONGC said in a statement gas was found in its G-4-AB well, which was drilled to a depth of 2,675 metres.
"Five zones have been identified to be hydrocarbon bearing in the well, of which the first one has been tested. The testing results have given the flow rates measuring 14.42 million cubic feet per day, through half-inch choke," it said.
The announcement follows ONGC's high-profile campaign to offload the government's 10 percent stake worth $2 billion in early March.
The company is spending $750,000 a day to explore for hydrocarbons in deep-sea regions and plans to drill 47 wells in deep-water regions in the Arabian Sea and the Bay of Bengal by 2007.