After a prolonged stalemate, Essar Oil may expect to commence second phase drilling of a little over 100 production wells at the Ranigunj (East) coal-bed methane (CBM) block near Durgapur in West Bengal, sooner than later, according to sources.

The company is currently producing to the tune of 35,000 standard cubic metres of CBM gas a day (0.035 mmscmd) from 15 wells in the asset.

Environment issues

Drilling operations in the block were suspended for nearly 8-10 months due to non-availability of environmental clearance. Apart from procedural reasons, complaints against the company for alleged violation of environmental guidelines also contributed to the stalemate.

While comments were not available from the company, sources in the Union Ministry of Environment and Forests indicated that on-site inspection by the Ministry's expert-panel failed to trace any evidence of alleged violation of rules by Essar.

Clearance favoured

According to sources, in meetings at the end of July, the expert panel members favoured granting due clearance to Essar project. The minutes of the meeting (which includes 63 other such cases in addition to Essar Oil) are now under preparation for formal clearance by the Ministry, expected in a month or two.

“The MoEF has nothing to hide. The recommendations (of the expert panel) along with scientific details will be published on the Ministry Web site,” a source said.

Essar Oil is part of the London stock exchange listed Essar Energy Plc. The company has contracts in place to place to sell 2.8 mmscmd of gas to Matix Fertilisers and Chemicals beginning April 2012 to be set up near Durgapur.

However, the delay in second phase drilling, may impact the production plan of the company.

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