Jay Polychem (India) Ltd, a unit of city-based Jay Madhok Group, made the oil discovery in the very first well it drilled on the block CB-ONN-2009/8 in Gujarat's Cambay basin.
The firm has since July last year drilled two wells and discovered huge oil pay zones in both the wells, sources said.
The discovery in the well Kharenti-A has been notified to the upstream regulator DGH and the government.
Sources said the discovery by Jay Polychem is huge and similar to oil being produced by ONGC in the neighbouring Padra field as also by GSPC in Ingoli field.
The block is operated by Jay Polychem (India) Ltd with 87 per cent interest, while Jay Polychem Pte Ltd holds the rest.
Cambay basin, which extends from Surat in the south to Sanchor in the north, covers an area of about 59,000 sq km with a hydrocarbon resource of more than 15 billion barrels.
Few dozen discoveries, mostly oil, have been reported in the basin. State-owned Oil and Natural Gas Corp produces oil from most of them and recently Oilex of Australia too has found tight oil.
Sources said the well Kharenti-A was drilled to a total depth of 858 meters in July last year and encountered significant oil shows of Olpad Formation.
Testing done this month resulted in oil being found in three zones. A gross column of 52 meters was interpreted from log analysis and testing data to be oil bearing, they said.
Initial analysis of the oil samples suggests the presence of oil of API 14.
Sources said the company is taking necessary steps to establish potential of the discoveries.
The firm will further deploy world best technologies used to produce heavy oil in USA, Canada and South America to determine and commence production on commercial basis from the Khrentie field.
Jay commented that the discovery of a significant oil column in their first well in CB-ONN-2009/8 is encouraging for the ongoing prospectivity of the block.
The discovery enhances their understanding of the Olpad Play which extends over the entire block and establishes hydrocarbon potential of the various prospects in the block, the firm said.
Jay had won the block in the 8th round of bidding under New Exploration Licensing Policy (NELP).
The discoveries are first in NELP VIII blocks and very significant in the recent times in the Cambay basin.
The 136 sq km CB-ONN-2009/8 was among the 13 onland blocks along with 8 deepwater and 11 shallow water areas that were awarded to explorers in 2010.
The company, which has acquired 200 sq km of 3D seismic data, will drill 5 more wells by next quarter. Site for the new wells has already been acquired and the development is on.
It also has city gas distribution licence to retail CNG to automobiles and piped cooking gas to households in Jallandhar, Ludhiana and Kutch (east).