Essar Oil and Gas to invest ₹3,000 crore to boost gas output

Essar Oil and Gas Exploration and Production plans to invest ₹3,000 crore in its Raniganj coal bed methane (CBM) block in West Bengal, aiming to increase its contribution to India’s gas output from 1% to 5% in five years.

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Essar Oil and Gas Exploration and Production, owned by the Ruia brothers, is set to invest up to ₹3,000 crore in its flagship coal bed methane (CBM) block in Raniganj, West Bengal, to boost gas production. Pankaj Kalra, the CEO, stated, “We are determined to raise our contribution to India’s overall gas output to 5% in the next five years from 1% currently,” indicating the company’s ambitious plans. Kalra also mentioned that of the 500 sq km of acreage, only 70 sq km has been harnessed, with over 80% still untapped.

CBM, a natural gas stored in coal seams, contains 90-95% methane. With India having the fifth-largest proven coal reserves globally, there is significant potential for CBM exploration and exploitation, as noted by the Directorate General of Hydrocarbons.

The Raniganj field has a total in-place resource of 4 trillion cubic feet (TCF) of gas, but only 92 billion cubic feet (BCF) or 0.92 TCF has been extracted over the last decade. Kalra emphasized that, “Our recovery has not even been 2-2.5% of the resource,” highlighting the need for further development. The company plans to drill new wells, expecting to increase production from the current 0.93 million to nearly 4-5 million standard cubic meters of gas.

Over the past two years, the company has invested more than ₹500 crore in drilling new wells. Additionally, there is a potential shale presence in the block, which, if confirmed, could be a significant breakthrough for both the company and the country.