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The Government will cancel award of a coal-bed methane (CBM) block in Tamil Nadu to Great Eastern Energy Corp Ltd (GEECL) for not fulfilling contractual requirements, Oil Minister Dharmendra Pradhan said today.
GEECL was awarded block MG-CBM-2008/IV for extraction of gas lying below coal seams, called CBM, under the fourth round of CBM block auction in 2010.
The production sharing contract (PSC) for the block was signed on July 29, 2010.
“The contractor (GEECL) has not submitted the requisite documents, namely, bank guarantee, financial performance guarantee, etc, as required under the contract till date despite a notice being issued by the Ministry of Petroleum and Natural Gas,” he said in a written reply to a question in Rajya Sabha here.
GEECL has not initiated any exploration activity on the block and the first phase of exploration expired on November 3, 2013.
“Action for cancellation of the contract has been initiated in line with the provisions of CBM contract,” Pradhan said.
GEECL was awarded CBM block MG-CBM-2008/IV, measuring 667 sq km in Tamil Nadu for exploration and exploitation of CBM gas in Mannargudi area, he said.
The Government has so far awarded 33 CBM blocks in four rounds of auctions. Of these, 13 blocks have either been relinquished or offered to be relinquished due to poor CBM prospectivity.
GEECL has begun production from Raniganj (South) block in West Bengal and is currently producing 0.38 million standard cubic metres per day, while state-owned Oil and Natural Gas Corp (ONGC) has entered the development phase in four blocks, including Raniganj (North).
Reliance Industries (RIL) has entered the development phase in its Sohagpur East and West CBM blocks in Madhya Pradesh, while Essar Oil has done the same in case of RG(E)-CBM-2001/1 block in West Bengal.
To a separate question, Pradhan said exploration activities have not started in six oil and gas exploration blocks “due to delay in grant of Petroleum Exploration Licence (PEL) by the respective State Governments in the last two years.”
Of these blocks, two are in Madhya Pradesh, one in Rajasthan and the remaining three in Gujarat. The Madhya Pradesh blocks were awarded to Deep Energy, while Focus Energy bagged rights for the Rajasthan block.
The Gujarat blocks pertain to Deep Energy, Pratibha Oil and Natural Gas Pvt Ltd and Sankalp Oil and Gas Resources, he said.
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