Essar Oil Mulls Further Investment in Raniganj CBM Block

Essar Oil has is expected to invest another Rs 2,000 crore ($400 million) at its coal bed methane block in Raniganj in West Bengal. The company has already invested about Rs 800 crore ($160 million) in the project.

“We are planning to invest another Rs 2,000 crore ($400 million) for the future work. For this, we have applied for the requisite approvals, including environmental clearance,” said Iftikhar Nasir, chief executive officer (exploration and production) of Essar Energy, Business Standard reported.

The project is planned to have 500 wells, while it got permission to 73 vertical and up to four support wells, Business Standard added.

The newspaper also said that the final clearance from the ministry of environment and forests for the third phase of the project is set to be in place by September this year.

Essar is currently producing about 25,000 standard cubic metres per day (scmd) of gas from Raniganj which is being supplied to local customers like GAIL (India) and Mackeil Ispat & Forging Ltd.

The price of CBM from this block is reportedly $5.25 per million standard cubic meters per day (mscmd) with an additional $1 per mscmd charge, the newspaper quoted Nasir as saying.

Recently, the total proven and probable reserves estimates at Ranigunj was raised by 113 billion cubic feet gross, or 18.8 million barrels of oil equivalent. Essar is one of the country’s leading CBM players, with 2,733 square kilometre of acreage and more than 10 tcf of reserves across five blocks.