Essar Oil & Gas Exploration & Production Ltd. (EOGEP) plans to double production from its Raniganj East coalbed methane block in West Bengal and assess shale resources there and in CBM holdings elsewhere in India.
The company has signed a 15-year agreement to sell CBM output at the increased rate of 2.3 million standard cu m/day (MMscmd) to state-owned GAIL (India) Ltd. GAIL won a competitive bid round held under a government program allowing parties to negotiate the gas price.
The agreement links the CBM price to the 3-month daily average price of Brent crude oil.
EOGEP will increase production from 348 CBM wells on the block, where output has exceeded 1 MMscmd, and drill 148 more wells.
The Raniganj East block will be a focus of its study of shale potential.
The Union Cabinet recently removed hydrocarbon-type distinctions from oil and gas licenses and allowed development of shale resources under licenses held by nonstate operators (OGJ Online, Aug. 2, 2018).