Deep wants CBM partners for Singrauli block

Vol 14, PW 20 (07 Apr 11) People & Policy

Ahmedabad-based Deep Industries is looking to ‘farm-out’ a part of its 90% stake at the 330-sq km Singrauli CBM block SR-CBM-2005/III in Madhya Pradesh, operated by US-based Coal Gas Mart, which holds 10%.

PETROWATCH learns Deep appointed Mumbai-based Centrum Group in March (last month) to help with the farm-out. Centrum has prepared an eight-page Information Memorandum on Singrauli which is circulating among interested companies.

“Deep is yet to decide how much it will sell,” says an industry source. “This decision depends on the ‘valuation’ (of the Singrauli block) by interested parties.

” Singrauli, he adds, “holds good potential” and the consortium is likely to have a report on ‘gas-in-place’ and the ‘resource base’ by October 2011. Coal Gas Mart is preparing to drill five test wells at Singrauli, for which it is planning to use a 500-hp rig.

These wells will each be drilled to approximately 1000 metres TD and could take up to three months to complete. Deep and Coal Gas Mart are also busy hiring contractors to carry out ‘cementing’ and ‘hydro-fracturing’ work for the proposed test-well campaign expected to begin by the middle of May (next month).

They believe each of these test wells could produce between 5000 cm/d and 10,000 cm/d of gas. Centrum’s Information Memorandum on the Singrauli block also includes details of the 386-sq km block GV-CBM-2005-III in Andhra Pradesh, operated by Coal Gas Mart with a 10% stake, where Deep holds 40% and Gujarat-based Adinath Exim Resources holds 50%.

Yet no one is likely to show interest in this Andhra Pradesh block as the consortium hasn’t secured a PEL, despite pressure from the oil ministry, which wrote to Andhra Pradesh state authorities in March.