The Hindu Business Line : ONGC identifies 28 spots for coal bed methane extraction

OIL and Natural Gas Corporation has identified 28 locations for drilling of coal bed methane, as part of its plan to drill 56 CBM wells in three years from last August. The company is in the process of hiring an international turnkey contractor for this purpose.

Coal bed methane is the natural gas obtained in the coal seams.

ONGC's pilot projects in the West Bokaro-Jharkand region have proved the existence of CBM and the commercial viability of mining it.

The company officials said here on Tuesday that ten international companies have responded to its tender for a turnkey contract for CBM extraction.

Meanwhile, ONGC has had some breakthrough in its talks with the Nagaland Government (and the locals there) over the rights to produce oil from the State. The State that lies between the two hydrocarbon producing regions of Assam and Myanmar is also expected to hold oil or natural gas.

The problem was, according to the Naga laws, the royalty for minerals would have to be paid to the individual landowners and not to the Government. This was a stumbling block in exploring the region, as the locals came up with stiff demands.

A senior official told Business Line that the only issue that remains to be solved is about how Assam and Nagaland would share the royalty for hydrocarbons extracted from the border regions. Efforts are on to get the chief secretaries of both the States to discuss about the same.

Officials also said that of the Rs 8,356-crore earmarked for redevelopment of Bombay High, about Rs 2,500 crore has been spent.

The five-year project is for taking steps to increase the pressure in oil reservoirs, so that more oil flows out. This is done by pumping in water (water injection) or gas into the well.

Answering a question, they said that ONGC would have to take a hit of around Rs 2,000 crore because the Government of India has asked the company to share the burden of LPG subsidy with the refining companies IOC, BPCL and HPCL.