India's petroleum ministry has decided to offer eight exploration blocks in the first round of bidding for coalbed methane in December 1998.
Most of these blocks are located in the eastern state of Bihar, while some are in the coal-bearing areas of eastern Madhya Pradesh state (see maps, OGJ, May 25, 1998, p. 42). After the bids are received, the process of evaluation and the final award of contracts is expected to take another 9 months. The actual exploration in these blocks will therefore only start late next year.
Disappointed by the unusual delay in the announcement of the bidding rounds, American multinational Texaco has informed the Indian government of its decision to refrain from participating in the bidding.
Texaco is a world leader in coalbed methane extraction technology and has some commercial fields producing coalbed methane in the U.S. Some other oil majors may also have second thoughts on participating in the Indian bidding rounds.
Industry sources complained that the Indian authorities take long periods to decide-firstly on announcing the bidding rounds, and then on negotiating contracts before awarding them.
"Recently, the government announced a decision to start negotiations for production sharing contracts for 18 oil and gas exploration blocks," said a top-ranking Texaco official. "Actually, some of these blocks had been awarded four years ago, but work on the sites could not start in the absence of a production sharing contract."
In addition to the eight coalbed methane blocks now announced by the petroleum ministry, the Parbatpur block in the Jharia coalfields of Bihar is expected to be given jointly to Coal India Ltd. (CIL) and Oil and Natural Gas Corp. on a nomination basis.
The ministry's decision to recommend the Parbatpur block for exploration by CIL and ONGC stems from the fact that the latter is already working on the block for some time, and has invested heavily in it.
India has an estimated 200 billion metric tons of coal reserves, which have a potential for 800 billion cu m of coalbed methane resources. The resource base could be much bigger, considering some preliminary assessment of absorption capacity of Damodar Valley coal, as well as coal from the Cambay basin.
According to geologists, coalbed methane resources of this magnitude can support a long-term gas production rate of 40-50 million standard cu m per day, the equivalent of the current level of natural gas production in India.
International Coal Seam Report, Denver, lists gas in place at 4.1 tcf in Seam 14, Amlabad Colliery, Jharia field, Bihar state, and 3.4 tcf in the Disergarh seam, Chinakuri Colliery, Raniganj field, West Bengal and Bihar states.
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