India’s Oil and Natural Gas Corporation (ONGC) will invest around $5b to develop a major gas asset in the eastern Krishna Godavari (KG) basin, with a higher resulting level of output so that it will become the company’s second biggest hydrocarbon asset in the country.

The new investment may boost ONGC’s natural gas output by 25% and crude oil production by almost 15% over the next 4-5 years, a major leap for a company often criticized for failing to arrest a production decline from its ageing fields. The asset, which the state-owned company acquired in 2005 under a swap agreement with UK’s Cairn Energy, can produce up to 17mscm/d of natural gas and 75,000b/d by 2020.

Chairman and Managing Director of the country’s biggest explorer, D.K. Sarraf, said that arrangement for the investment would be concluded by the end of March, with a view to tapping higher gas prices, Reuters reported.

The announcement follows a government decision to allow producers demand a higher price of gas extracted from hydrocarbon basins located in the deepwater and ultra deepwater, where costs can be significantly higher. According to the India Times, all the discoveries in deep water, ultra deep, and in high temperature-high pressure (HTHP) schemes, which are currently not producing, would qualify for this new gas pricing regime.

ONGC will thus invest in its deepwater KG-basin block in order to enhance its production capacities. After a decade-long trend of falling production, the company reported a marginal rise in its overall production for the fiscal year ended March 2015. Sarraf noted that the company expected to maintain the annual production growth.