CBM production can be boosted by re-auctioning relinquished blocks: GEECL’s Prashant Modi

To boost coal bed methane (CBM) production, the Centre may consider re-auctioning relinquished coal mines, said Prashant Modi, Managing Director and Chief Executive Officer of Great Eastern Energy Corporation Ltd (GEECL).

“I think there are enough blocks which have been relinquished. Of the 33 blocks that were initially offered, only four to six, a handful, would still be operational. These relinquished blocks could be immediately put up for bidding again. The data for these blocks is available too,” Modi told BusinessLine.

Commenting on the current policy for CBM and the recent auctions that were conducted, he said, “The policy for Coal Bed Methane is fine. The government tried to auction six blocks for CBM exploration and production but they were not successful. This is because I don’t think they were very prospective. We had also evaluated them, but we did not bid.”

Modi also said that Coal India can follow the Discovered Small Field approach and bid out the blocks under the contracts similar to the ones ONGC had for the S-type blocks of ONGC. “These blocks were licensed out and the new operators that are coming in offer investment and royalty. Coal India can do the same for CBM, bid it (the coal mines) out and the operators who come will give the royalty to CIL or the government,” he said.

“We will evaluate any new CBM blocks if they come for bids,” he added.

On status of GEECL’s existing projects, Modi said, “We need to drill some 150 more wells in our existing fields and by next year, hopefully we will start the initial work on our shale programme. The initial expenditure in shale will be lesser as only exploratory wells will be drilled. The total outlay for the programme is estimated at $2 billion (₹14,000-₹15,000 crore) over 10 years. We will be spending another ₹1,500 crore in the CBM programme to drill the remaining wells.”

GEECL currently has operations in the Raniganj (South) Block in West Bengal. The company, in its contracted area, aims to drill a total of 300 wells, of which 156 have been drilled so far.

Commenting on the demand for natural gas in the country, he said, “Gas demand is expected to grow in the country. LNG imports are rising year-on-year and according to official estimates, the demand has been growing by around 5 per cent a year. I think it will increase further, in line with more people moving into urban areas.”