Essar Expects to Boost CBM Output from its Bengal Block

Essar Oil plans to increase coal bed methane (CBM) production from its flagship Raniganj block in the Indian state of West Bengal five-fold in the next year, according to Business Standard newspaper.

Currently, the company has 137 wells producing 220,000 standard cubic metres of gas a day (scmd), expected to rise to 1.2 million scmd by mid-calendar year 2015.

According to Business Standard, the company is selling the gas at an average price of $10 million British thermal units (mBtu) top local customers in and around Durgapur through cascades and pipelines.

In December last year, Greka Drilling and Essar Oil signed a $65 million contract where Greka will provide turnkey and allied services to Essar in India. Earlier this month Greka announced that further progress has been made following mobilization orders from Essar Oil in relation to the contract for 100 wells to be drilled in latter’s Raniganj East coal bed methane block in Durgapur.  

Five GD75 rigs are at present are being prepared for drilling at designated well sites, Greka said.

Two of the rigs are at present now fully erected and will begin drilling shortly. The remaining three rigs are still mobilizing to the Essar pre-prepared drill sites.  The first wells will be spud in mid-September, commencing the 100 well programme for Essar.

The drilling campaign is expected to last about 12 months.

Essar holds five CBM blocks, with an area of 2,700 sq km and prospective resources of about 10 trillion cubic feet. Raniganj is the first of five CBM blocks Essar holds, which it has put on stream. Its other four blocks are Rajmahal in Jharkhand, Talcher and Ib valley in Odisha and Sohagpur (NE) in Madhya Pradesh.

Essar was targeting production from the other four CBM blocks in the next three years, a company official told Business Standard.