DGH wants bids for contentious CBM field
In the Special DSF Bid Round 2024, one of the blocks on offer is a contentious piece of land outside the boundary of Essar Oil and Gas's Raniganj East block.
Measuring 16.29-sq km, it is the same area where Essar is facing high DGH penalties for drilling wells and producing CBM, allegedly without approval. Anyone interested must send bids for the latest DSF round by July 15 (2024), after the DGH launched it on May 28 (2024).
According to the DGH technical booklet, the 16.29-sq km SR-ONCBM(Raniganj)-2024 field is in Durgapur in West Bengal and is part of the Raniganj coalfield with two major coal seams, RN-3 and RN-4. Moreover, it has an average coal seam thickness of four to six metres, an average gas content of 2.4 to 10.8 cubic metres/tonne, a coal saturation of 56% to 96%, and a permeability of 2.5 to 36 millidarcy.
Eight wells have been drilled in the field, which holds bituminous coal. An industry source doubts anyone will bid other than Essar.
"Essar is producing from the adjacent 500-sq km RG(East)-CBM-2001/1 block, which has all the infrastructure readily available," he says. "Given the small area of the field (on offer from the DGH), no newcomer will find it commercially viable to mobilise a rig and set up production infrastructure."
In a May 13 (2024) notice, the oil ministry wanted Essar to explain by May 28 (2024) why it should not be fined for violating the Oilfields Regulation and Development Act,1948 and the Petroleum and Natural Gas Rules, 1959 and why the ministry should not recover Rs315.53cr ($39.4m) for CBM produced until September 2023 without a valid licence from 28 wells drilled over 23-sq km outside the Raniganj block. Until a new contractor is selected, Essar will retain custody of the 16.29-sq km area on offer outside its block and continue selling CBM under existing gas sales contracts.
However, the money will be retained by GAIL, the designated buyer.