ONGC in talks to offload stakes in CBM blocks

Vol 14, PW 25 (16 Jun 11) Exploration & Production

Three companies are interested in picking up stakes at four of five ONGC-operated CBM blocks in India.

PETROWATCH learns UK-listed Greater Eastern Energy, Mumbai-based Essar and Brisbane-headquartered Dart Energy have submitted separate proposals to ONGC about acquiring stakes at its Jharia, Bokaro and North Karanpura CBM blocks in Jharkhand; and its Raniganj North CBM block in West Bengal. Most interest is on the Raniganj North block, awarded to ONGC (74%) and Coal India (26%) on a ‘nomination’ basis in 2003.

Great Eastern wants a 37% stake in the Raniganj North block, which is close to its own Raniganj South CBM block where it holds 100%. Essar, meanwhile, is interested in a 50% stake at all four blocks, while Dart wants 30% in each of the four blocks.

“Raniganj North is one of the most prospective ONGC blocks and we are definitely interested,” confirms Great Eastern chairman YK Modi. “But we’ll pick up a stake only if we can become operator.

” Great Eastern believes Jharia is also “prospective” but has chosen to submit a proposal only for Raniganj North, for now. An ONGC official adds all three companies are hoping to assume the role of operator at these blocks in addition to securing participating interests.

“We’re examining the proposals,” he admits. “We find it very difficult to work in (politically volatile) West Bengal and Jharkhand; it makes sense to let private companies become operator; they can better develop the fields.

” ONGC has yet to decide how much it will sell its stakes for in these CBM blocks, but expects to finalise plans in six months. An Essar source confirms company plans to make a pitch for the four ONGC blocks.