The Hindu Business Line : Essar Oil plea to include CBM in exploration licence

Essar Oil Ltd (EOL) has requested the Union Ministry of Petroleum to include coal bed methane (CBM) in the petroleum exploration licence (PEL) granted to the company for CB-ON/3 onshore block in Cambay basin. Essar Oil holds 100 per cent interest in the block and has already drilled three test wells there.

While some preliminary indications of a possible oil and gas reserve were noted during the drilling process, the company is waiting for interpretation of the data to assess the reserve size, if any. The test results will be available in the next two to three weeks.

"We have drilled a very limited area in the 574 sq. km block. Depending upon the test results we will take a call on our future development programme including 3D seismic survey in the entire block," a company official said.

It may be noted that Cambay is an identified oil and gas bearing region and several companies have already struck oil in the basin.

CBM potential

Admitting that the block has CBM potential (apart from oil and gas) in the deep coal seams in the area, sources said the existing PEL did not allow the company to explore it.

"Accordingly, we have requested the Centre to allow us to do so incorporating the necessary changes in the exploration licence."

Secured through the seventh round of bidding before NELP, the production sharing contracts and joint operating agreement of the block were signed in 1998.

Apart from its interests in the oil and gas blocks, EOL holds the sole CBM block in coal belt of Ranigunj-East in West Bengal.

Secured through CBM Policy-I, Essar holds 100 per cent stake in the block and has already taken steps to explore prospects in the block.

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