Essar Oil plans to drill up to 300 production wells at Ranigunj (East) coal-bed methane asset near Durgapur in West Bengal, over the next one year to boost methane output to approximately 3 million cubic metres.
The project – including wells and the associated surface infrastructure – is estimated to cost nearly Rs 2,500 crore. According to Iftikhar Nasir, CEO of E&P business, Essar Energy Plc, Ranigunj currently produces 60,000 cubic metres of methane from 135 wells.
Addressing a tele-conference on Monday, Nasir said the company has received the due environmental clearance for drilling up to 650 wells. “We will immediately drill over 300 wells to reach the desired production levels. The rest of the wells will be added during the life cycle of the field to maintain production at the plateau level,” he said.
Lagging behind
According to the Essar Energy IPO document, the company was scheduled to be ready to supply 2.8 mcmd of gas by April last year. Essar holds 100 per cent interest in the asset.
Elaborating the reasons behind slow production growth, Nasir said that CBM fields are distinctly different from the traditional oil and gas assets as it takes longer time to reach peak production. “An average CBM well takes 3-6 months for de-watering.”
Also, the company claims to have been “managing production” till the main consumer Matix Fertiliser commissions its facility approximately 30-40 km away from Durgapur.
Essar, currently, has agreements with at least two prominent industrial facilities in Durgapur to supply over 1,00,000 cubic metres of gas.
More CBM assets
On the exploratory CBM assets at Rajmahal (Jharkhand) and Sohagpur (MP), Nasir said the company is hopeful to enter drilling phase in both the assets in a year.
On being pointed out that the exploration in blocks adjacent to Rajmahal asset did not yield promising results, Nasir said the company is still in exploratory phase and is hopeful of a “positive” result. Overall, Essar holds five CBM assets in the country.
Overseas business
Regarding overseas oil and gas E&P business, Nasir said the company roped in ENI of Italy as the operating partner in Vietnam. And, efforts are on to rope in local partners for development of assets in Africa.