Essar Oil has commenced production of gas from its Raniganj CBM block in West Bengal. The block is expected to achieve peak output in two to three years. The block will initially produce 90,000- 100,000 cubic metres of gas per day and will touch a peak of 3.5 mmscmd by the fourth quarter of 2012. The Raniganj block has estimated resources of 4.6 tcf and recoverable resources of around 1 tcf.
Essar Oil is investing $300 million in CBM gas production and plans to drill 500 wells over three years. The gas will be sold to fertiliser plants at $4.2 per million British Thermal Unit.
The company's Rajmahal block in Jharkhand has estimated in-place reserves of 9.5 tcf, with a recoverable resource of 4.7 tcf.
Last year, the company signed production sharing contracts for four CBM blocks it had won under the fourth licensing round. The government had awarded 32 CBM blocks with reserves of 62 tcf to various companies. Essar Oil's five CBM blocks (with different companies) at Jharia, Raniganj East, Raniganj South, Sohagpur West and Sohagpur East, are currently producing 0.15 mmsmcd and output is expected to reach 7.4 mmscmd by 2013.
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