Private players may lose out on the opportunity to explore coal-bed methane, as two key Ministries — Petroleum and Natural Gas, and Coal — hold divergent views on them.

Oil Minister M. Veerappa Moily has proposed that private players be allowed to explore CBM (a form of gas found in coal beds) along with Coal India in its existing mines. But, Coal Minister Sriprakash Jaiswal has contested this.

“The proposal to allow private companies to take out CBM in Coal India blocks was floated by the Petroleum Ministry twice in the past one-and-half years. But, the Coal Ministry has objected to it, as it is not comfortable allowing private players to foray into Coal India’s mines,” a Government official told Business Line .

With the third-largest proven coal reserves, and the fourth largest coal producer in the world, India holds significant prospects for commercial recovery of CBM. The resource has been estimated to be around 4.6 trillion cubic meters , according to the Directorate General of Hydrocarbons .

No policy regime

With no consensus emerging, the only option left is to allow Coal India to extract CBM. However, the public sector miner has no experience in gas exploration. “They (Coal India) will also have to outsource the work to private players,” the official added.

The final call on the issue will be taken by the Cabinet, once the two Ministries are able to reach agreement .

Currently, India does not have a policy regime for simultaneous extraction of CBM and coal. But, it does have a CBM policy. The Petroleum Ministry has auctioned 30 CBM blocks in four rounds. Three others have been allocated on nomination basis. Currently, three CBM blocks are producing around 0.15 million standard cubic metres per day (mscmd). This is likely to touch 7.4 mscmd by 2013, according to the DGH.

> siddhartha.s@thehindu.co.in

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