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ONGC faces setback in CBM exploration as tech cos back out

Pratim Ranjan Bose

Kolkata , Dec. 27

ONGC's bid to offer turnkey contracts for exploration, development and commercial production of coal-bed methane (CBM) has suffered a setback. Despite showing an interest during the pre-bid exercise, the technology companies concerned have finally withdrawn from the race because of the risk involved in exploration.

Company sources said that in the changed scenario, ONGC was considering taking up exploration and development projects all by itself by hiring the services of technology companies.

"We are currently reviewing the situation and will be finalising a new scheme for exploration, development and commercial production of CBM shortly," said an ONGC source.

On whether the recent setback would have any impact on the project schedule, the sources said, "We have set for ourselves a steep target for commercial production of CBM in 2006-07 and we stick to that."

ONGC had previously projected an estimated investment of Rs 10,000 crore for commercial production of CBM — primarily for the power sector — in six coal blocks in the Ranigunj-Jharia coal belt spread over West Bengal and Jharkhand. The project was taken up in collaboration with Coal India Ltd.

ONGC has already invested over Rs 100 crore in pilot projects for exploration and test production of CBM.

The company has identified a reserve with a 6,000-cubic-metre production capacity per day in Jharia, which is higher than the average production of 2,500-3,000 cubic metres per day registered in Australia and the US.

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ONGC faces setback in CBM exploration as tech cos back out



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