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Troubled by its failures in CBM (coal-bed methane) development, the state-run oil and gas major ONGC is exploring opportunities to farm-out equity interests in its four CBM assets including one in West Bengal and three in Jharkhand. The company has already received proposals in this regard from at least four players in the private sector.
According to sources, among the interested parties, at least three, including Australia headquartered Dart Energy (formerly Arrow), Great Eastern Energy Corporation (GEECL) and Essar Oil have an established track record in developing coal seam gas in a global or Indian context. This apart, a consortium of Jindal Steel and Deep Industries has also expressed interest in picking up interest in the assets.
“We have received preliminary proposals from the four parties to enter in farming in agreements to acquire equity stake in Jharia, Ranigunj (North), Bokaro and North Karanpura CBM assets,” an ONGC source told Business Line .
Farm-in opportunities
While it is not clear if ONGC would offer operating interest to the prospective partners, sources said that Dart, GEECL and Essar had been exploring the farm-in opportunities in the PSU major operated CBM blocks, for nearly a year now.
Of the four assets, Jharia and Ranigunj (North) were awarded to ONGC on nomination basis. Bokaro and North Karanpura were awarded during the first round of CBM biding in 2000.
Private sector ahead
The pubic sector major has so far been successful in producing very limited quantities of gas from the most prolific Jharia asset. A $200-million development programme, launched in the block in 2007, to prop up production to 3.5 lakh standard cubic metre a day yielded little result.
Though large quantities of in-place reserves of CBM were also identified in Bokaro, the field is yet to be developed.
In comparison the Delhi headquartered GEECL has began commercial production from the Ranigunj (South) nomination block in West Bengal as early as in 2007 and is increasing the capacity, steadily.
Essar Oil too started commercial production from Ranigunj (East) in 2009 and is now on course to expand capacities. Dart has established track record in CBM production in Australia.
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