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ONGC is considering fresh strategies for coal bed methane (CBM) development, nearly two decades after initiating exploration and spending hundreds of crores in largely unsuccessful attempts to bring the assets into production.
On the cards are pruning the portfolio to manageable levels; adopting realistic production targets and inclusion of technology partners from players in the CBM sector.
While the number of blocks has already been pruned from nine to four (including recent applications for relinquishment of South Karanpura and North Karanpura-West), ONGC sources say that the company is in the process of taking a “realistic” view on the development potential of its two nomination blocks in Jharia (Jharkhand) and Ranigunj (West Bengal).
Policy trouble
Industry sources suggest that contradictory policies of the Centre and the state governments have limited the CBM development potential of the region.
While the Ministry of Petroleum and Natural Gas went ahead with its agenda to promote CBM development; the Coal Ministry — under pressure to meet the growing supply shortfall of domestic coal — has granted mining rights in the region, overlapping the CBM acreages.
Parbatpur area in Jharia, where ONGC was implementing its $200-million CBM project, is now largely under captive mining. Similarly, nearly 60 per cent of 350-sq.km Ranigunj block is now set to be mined. In addition, the airport city of Bengal Aerotropolis is also coming up in the region.
“We are trying our best to retain the CBM exploration rights. However, the situation appears to be difficult in Ranigunj,” an ONGC official told Business Line . He, however, added that the company would draft a fresh development plan for Jharia.
As doubts linger over the development potential of Ranigunj and Jharia, ONGC is pinning hopes on Bokaro in Jharkhand.
The company had in November 2010 submitted a development plan for the block, and is expecting the plan to be approved by the Directorate General of Hydrocarbons (DGH) next month.
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