Maoist rebels delay CBM production in Jharkand

Vol 13, PW 11 (05 Nov 09) People & Policy

Maoist violence is delaying first commercial CBM production by ONGC from the Parbatpur area of Jharia in lawless Jharkand.

“CBM from Jharia is almost at the delivery stage,â€‌ confirms ONGC. “First supplies could be between 15,000 and 20,000 cm/d.

ONGC planned to develop this field in 2006. Now it is 2009, but production still has not begun.

â€‌ ONGC attributes the delay to local challenges faced by its CBM customer, Mumbai-based Everest Kanto. ONGC has a five-year contract with Everest to supply 50,000 cm/d CBM from Jharia, which will be converted to CNG and sold to local industries around Jharia and neighbouring Bokaro, eventually to customers in Kolkata.

Peak CBM production from the Jharia block can eventually reach 300,000 cm/d but PETROWATCH learns first supplies to Everest, which would have been ONGC’s first commercial production in India, are delayed thanks to threats from Maoist rebels. ONGC says it is ready to begin delivering around 5000 cm/d but that Everest can’t receive because of problems setting up gas compression facilities.

“There are problems,â€‌ adds ONGC. “Local people want employment.

When they don’t get employment they are violent and use threats.â€‌ Everest is also finding it difficult to acquire land near Jharia thanks to prices being pushed up by demand from local coal mining companies.

Current rates are around Rs7.2 lakh/acre ($15,000). Violence against ONGC at Jharia is also a problem.

“There was an attack at one of our sites three or four months ago,â€‌ we hear. “Twenty to 30 workers were on site; thankfully no one was killed or injured.

â€‌ Worse, Jharia is a forested and tribal area making environmental and other clearances difficult. ONGC’s contract with Everest is for five years from July 10, 2008 - the date the term sheet was signed.

Both sides signed a GSA on February 25 this year.