The Hindu Business Line : ONGC mulls redesigning coal bed methane project

ONGC is finding it increasingly difficult to meet the `steep target' for commercial production of coal-bed-methane (CBM) in 2006-07. In fact, the company is still far from closing the deals regarding finalisation of exploratory and development drilling, which should have been sealed by November 2004.

While the initial effort to award turnkey contracts for exploration, development and production of CBM had failed to win the confidence of the technology companies even after prolonged negotiations and pre-bid exercises, ONGC's latest initiative to hire the services of technology providers and carry out the project on its own has not seen much progress so far.

"There is no denying that we are running much behind schedule so far. However, CBM being an emerging energy option, we are facing problems in selecting the right technology at the right price", a company source said. He, however, added that the company is still firm on starting commercial production in 2006-07.

The company is also considering redesigning the entire project. As against the initial scheme to start development drilling in the proven field in Jharia in Jharkhand and start exploratory drilling in four other blocks in Jharkhand and one block in West Bengal, ONGC is now considering launching the project only in Jharia and North Karanpura (also in Jharkhand) blocks in the first phase.

The company holds the Jharia block through a 90:10 joint venture with Coal India Ltd. It has identified a substantial reserve in Jharia. The North Karanpura block on the other hand was secured jointly with IndianOil (20 per cent) in CBM Policy-I. Exploration may also be initiated in the Bokaro block also held jointly with IndianOil.

North Karanpura and Bokaro blocks have come under the spotlight for their proximity to the industrial areas of Bokaro, Ranchi and Jamshedpur where CBM is expected to find a ready market.

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ONGC mulls redesigning coal bed methane project