The Indian government lifted the price ceiling for deepwater and ultra‑deepwater natural gas to $9.89 per MMBtu for the October‑March period, up 10% from the $8.90 cap that applied in the previous six months. The move directly benefits the KG‑D6 block, where Reliance Industries and BP extract gas in the Krishna‑Godavari basin.
For legacy fields operated by ONGC and Oil India, the All‑India Price Mark (APM) remains at $7 per MMBtu. However, a 10% premium is permitted on new‑well gas, giving an effective ceiling of $7.70 per MMBtu for new production from their nomination blocks.
The higher ceiling eases margin pressure for high‑cost deepwater projects while keeping legacy fields tightly capped. Analysts note that the 41% price gap between the new deepwater ceiling and the $7 legacy ceiling could translate into a measurable lift in operating profits for the KG‑D6 unit.
In sector terms, the deepwater ceiling now sits above the average gas price for Indian offshore assets, which hovered around $8.30 in the previous cycle. The jump is the largest single adjustment in over a decade and signals the government’s intent to reward investment in technically challenging gas plays.
Looking ahead, Reliance Industries is slated to report Q3 earnings on 22 November. Market watchers will gauge the policy’s effect on the company’s gas mix, CAPEX plans for KG‑D6, and the potential for further price revisions as the government reviews the APM framework next year.