Essar May Sell Stake in East India CBM Block

India’s Essar Oil and Gas Exploration and Production (EOGPL) may sell a minority stake in its flagship coalbed methane (CBM) block located in the eastern part of the country, Mint reported July 30 citing company sources.

According to the newspaper, EOGPL is planning to sell 30% stake in its Ranigang West Block in the state of West Bengal. “Essar Oil and Gas Exploration and Production is looking for partners in the CBM field and thus offering up to a 30% stake," Mint quoted a senior company official saying. He declined to disclose details.

The Raniganj CBM block could be valued at rupees 20bn ($290mn), according to energy consultants, and selling a 30% stake could fetch rupees 6bn for the company, the newspaper said. Another source told the newspaper that the funds raised could be used to expand company’s India CBM business. A company spokesperson, however, denied that EOGPL is looking to divest stake in the asset, Mint reported.

EOGPL has five CBM blocks in its portfolio but Raniganj East is the only operational one. The other four are Rajmahal in the state of Jharkhand, Talcher and Ib Valley in the state of Odisha and Sohagpur in the state of Madhya Pradesh.

In addition to EOGPL, Reliance and GEECL are the other companies producing CBM in India.