NEW DELHI: The oil ministry will grant ONGC another six months to drill the required number of wells and draw plans for producing coal bed methane (CBM) from the Raniganj-north block in West Bengal, which was given to the state-run firm nine years ago.
This will be the third extension for the project, in which ONGC holds 74% stake and its partner Coal India holds the rest. ONGC initially held nine CBM blocks, but relinquished five of them.
After successful drilling of pilot wells in the block, ONGC will submit a development plan to the government for producing CBM from the blocks. ONGC is yet to start commercial production from the blocks whereas private firm Great Eastern is already producing gas from Raniganj-south and Reliance Industries and Essar are set to start commercial production after the oil ministry approves CBM prices for their respective blocks.
According to Directorate General of Hydrocarbons, which has recommended an extension for ONGC, Raniganj-north blocks has a resource potential of 43 billion cubic meter of gas, which is comparable with Great Eastern Energy’s producing block in its vicinity.
ONGC officials said the delay in completion of wells in Raniganj block was because CBM prospective area overlapped with Ichhapur and Moira-Madhujore coal mines. “There was also land acquisition problem due to upcoming Bengal Aerotropolis project,” an ONGC official said requesting anonymity.
Problems continue despite taking up the matter with the West Bengal government and the oil ministry. “We had to shift locations of the wells and purchase land directly at exceptionally high cost,” the official said.
Oil ministry officials confirmed the development. “DGH has examined ONGC’s request and recommended six months extension for phase-II, which will be adjusted in the next phase,” an oil ministry official said requesting anonymity.
ONGC has reported significant success in its Jharia block where drilling of wells has resulted into gas production and the company is selling some incidentally produced gas.
CBM is an eco-friendly natural gas stored in coal seams, which is mainly used as industrial fuel. India has an estimated 4.6 trillion cubic meter of CBM reserves. So far, 238 billion cubic meters CBM has been established. CBM is also called a green fuel as its commercial production helps in reducing the green house gas effect by preventing direct emission of methane gas from coal mines.