Coal bed methane row with Gujarat near resolution

Vol 4, PW 13 (02 Aug 00) People & Policy

A long running dispute between Gujarat and the Indian oil ministry over coal bed methane is drawing to a close.

Petrowatch understands breakthrough came during a visit to the Gujarat state capital Gandhinagar on 28th July by oil secretary Subbaram Narayan. "We are trying to find an amicable solution," a delegation source tells Petrowatch, "A lot of clearing of the air has taken place at the official level." A planned visit to Delhi this month by Gujarat chief minister Keshubhai Patel should see an end to the dispute, which has delayed a licensing round for nine coal bed methane blocks.

Disagreement has also delayed an exploration programme by Tullow Oil, whose Gujarat concession CB-ON/1 sits on potential CBM reserves claimed by the Gujarat government. At issue is the sovereignty of CBM reserves in India.

Do they belong to state governments or to the central government India wants to auction up to nine blocks, spread across five states: Gujarat (2); Madhya Pradesh (2); West Bengal (2); Assam (2) and Rajasthan (1). Only West Bengal and Rajasthan have agreed to let Delhi oversee the tender.

Gujarat has refused, insisting it can organise one on its own - a view ridiculed in Delhi: When you have an international tender, you cant offer just two blocks." Madhya Pradesh and Assam are watching Gujarat for any sign that Gandhinagar drops its demand. If it does, these two states are likely to follow suit and a national CBM tender can proceed as planned.