Essar Oil and Gas plans to double CBM output from Raniganj block by 2021
Jun 14th, 2018
New Delhi: Ruia-owned Essar Oil and Gas Exploration and Production Ltd (EOGPL) is planning to more than double Coal Bed Methane (CBM) production from its flagship Raniganj East block to 2.3 Million Standard Cubic Meter per day (mmscmd) from the current 1 mmscmd, a senior company executive said.
“We plan to invest around Rs 900 crore in the coming 18 months to drill an additional 152 wells in the block. Our aim is to more than double the production from the block to 2.3 MMSCMD. We were able to generate more than Rs 210 crore as revenue from our oil and gas business last financial year and expect to generate over Rs 400 crore in the current fiscal,” EOGPL Chief Executive Officer (CEO) Vilas Tawde told ETEnergyWorld in an interview.
The company is currently selling its entire CBM production from the block located in West Bengal to state-owned natural gas utility GAIL (India) at an average price of $8.164 per Million British Thermal Unit (MMBTU) on Net Calorific Value basis under a 15-year gas supply contract.
The plan includes investing Rs 300 crore in the current fiscal ending March 2019 to monetize the block. EOGPL’s CBM portfolio includes five blocks. Only one of them, Raniganj East, is currently operational. The others include Rajmahal in Jharkhand, Talcher and Ib Valley in Odisha and Sohagpur in Madhya Pradesh.
Tawde said the five blocks possess estimated 10 Trillion Cubic Feet (Tcf) of CBM reserves and the initial work on the Rajmahal and Sohagpur is expected to start post monsoon.
India’s total CBM production — from blocks located in Jharkhand, Madhya Pradesh and West Bengal — increased 30 per cent to 735 MMSCM last financial year (2017-18) from 565 MMSCM in the previous fiscal, according to oil ministry’s data.
Apart from the five CBM blocks, Essar’s oil and gas portfolio includes operational refining capacity of 68 million barrels per day of crude in the UK where it also runs a network of 55 retail outlets. As part of its upstream portfolio, the company has interests in Cambay basin, Vietnam, Mumbai offshore and in Nigeria.