GEECL, ONGC Spar Over CBM Asset

In an interesting turn of events, Mannargudi Lignite exploratory CBM asset in the Indian state of Tamil Nadu allotted to Great Eastern Energy Corporation Ltd (GEECL) in 2010, is now found to be overlapping a number of onshore nomination blocks of the public sector oil and gas major ONGC, Business Line has reported.

The issue came to light when GEECL asked ONGC to remove its installations from the CBM block, the newspaper said citing sources.

The resulting review found that ONGC is a valid holder of petroleum exploration licences (for exploration) and mining lease (for oil production) for the areas concerned. Both the licences are granted by the state government concerned based on the contracts with the India's oil and gas ministry.

The ministry is now trying to settle the dispute, possibilities are looming large that the PSU major may have to make way for the private sector CBM operator, the report said.

The report further said though ONGC claimed its stake over the disputed blocks, the Government may not renew its contracts – beyond March 31, 2013 - with the oil and gas major for areas under exploration, citing non-performance.