Reliance not so lucky with its CBM exploration wells

Vol 9, PW 7 (14 Jul 05) Exploration & Production

Unlike its gas exploration business, coal bed methane is not turning out to be the expected gold mine for Reliance - quite the reverse.

Industry sources believe Reliances CBM exploration programme could become a black hole, swallowing up huge amounts of cash and yielding negligible returns. Reliance was awarded two blocks from the first CBM licensing round: Sohagpur (West) and Sohagpur (East).

On each block Reliance met its commitment to drill eight coreholes in the Phase-I work programme. Coreholes are drilled to obtain data on coal seam thickness, quality, depth and gas content.

Coal seam thickness at Sohagpur (East) was between four and eight metres while at Sohagpur (West) was between eight and 18 metres. Gas content was found to be between two and 14 cubic metres per tonne on both blocks.

Permeability was recorded at between three and 367 millidarcies on both blocks. We understand three coreholes at Sohagpur (West) and five at Sohagpur (East) were abandoned.

Of the approximately 500-sq km area of each block, only 200-sq km at Sohagpur (West) and around 50-sq km at Sohagpur (East) was found useful for further work. After completing the coreholes, Reliance drilled a total of 10 test wells on both blocks.

In April, Reliance began dewatering operations at the test wells to release gas held on to the coal surface due to the pressure exerted by water present within the coal seams. A source tells us that about 600 cubic metres of water is being pumped out from each well every day but that the wells are yielding only between 200 cm/d and 1500 cm/d gas considered a very poor figure.

We are told the thumb rule for CBM commercial viability is to yield 1000 cm/d gas from every metre of coal seam. Each of these wells may produce a maximum between 3000 cm/d and 5000 cm/d gas, we learn.

Even this is not economically viable.