ONGC to invest Rs 3500 crore for developing 3 CBM blocks

State-owned Oil and Natural Corp (ONGC) today said it will invest Rs 3,500 crore in extracting gas lying below coal seams (CBM) in three coal-bed methane blocks in eastern India.
"We see a peak production of 3.2 million standard cubic meters per day of gas from the three CBM blocks," ONGC Director (Onshore) Ved Prakash Mahawar told reporters here.
ONGC will drill over 350 wells in three blocks in Jharia, Bokaro and North Karanpur in Jharkhand.
A fourth block in Ranigajan North in West Bengal may be relinquished as it may fall in way of a planned air-strip.
"Production will start in three years and peak output of 3.2 mmscmd is likely in 2020-21," he said.

On pricing, he said CBM production is viable at USD 4.8 per million British thermal unit gas price. In comparison, the current government mandated rate is USD 4.24.

ONGC sells CBM gas from wells at Parbatpur in the Jharia block at an approved price of USD 5.1 per mmBtu.
Mahawar said the company board has approved an investment of Rs 1,200 crore in the Bokaro block to produce a peak gas of 0.7 mmscmd.
In all, 160 wells are to be drilled on Bokaro block, of which 9 have already been drilled, he said.
ONGC is the operator of Bokaro as well as North Karanpur blocks with 80 per cent interest. Indian Oil Corp (IOC) holds the remaining 20 per cent.

It is the operator of the Raniganj North block with a 74 per cent stake and Coal India Ltd holds the rest. In Jharia, ONGC holds 90 per cent and Coal India the remaining 10 per cent.
The Jharia block is estimated to hold 85 billion cubic metres of gas reserves, North Karanpura 62 billion cubic metres, Bokaro 45 billion cubic metres and Raniganj North 43 billion cubic metres.
Oil Secretary K D Tripathi said India's current CBM output is around 1 million standard cubic meters per day or one per cent of the total natural gas production.
The output is targeted to be raised to 5 mmscmd in three years, he added.