Essar Energy to invest additional 1000 cr in its West Bengal project

Recently, Essar Energy, as the first company in India, marked the highest production of CBM gas from nearly 300 wells at its flagship project in West Bengal's Raniganj (East) block with a rate of 1 million scmd.

According to the company, CBM production assumes an added significance to West Bengal as hydrocarbon discovery on a commercial scale in the conventional reservoirs like sandstone or limestone is yet to materialize. With Raniganj (East) Block on stream, the quest for unconventional energy resources has begun in good earnest in the state.

"CBM offers a new energy frontier as India evolves to a gas based company. Delivering 1 million scmd from Raniganj (East) Block marks the beginning as the potential is tremendous. We have targets to ramp up CBM from 350 wells to 2 million scmd by March 2017 and to reach a plateau of 3 million scmd by mid of FY2017-18," Essar Energy's CEO (Exploration & Production-E&P) Manish Maheshwari said on Wednesday during a press conference here in West Bengal's Durgapur city.

"The Raniganj (East) Block has sizeable CBM reserves with 25 to 30 years of field life. With a cumulative investment of 3300 crores rupees till date, Essar Energy has drilled and fracked nearly 300 wells and established an infrastructure to produce, condition, compress and deliver CBM gas to the industrial consumers in Durgapur," he further added.

According to the 2016 reserve report from the USA's Netherland Sewell & Associates, Inc. (NSAI), probable and possible gross CBM reserves in the Raniganj (East) block at 1.09 TCF. The block is assessed to have additional resources in the contingent category of around 270 BCF.

Meanwhile, a study undertaken with the support of US Trade and Development Agency (USTDA), by an independent US firm with expertise in shale, have made a preliminary assessment of original in-place shale gas resources of around 8 TCF underneath the CBM play in Raniganj (E) block.

"Essar Energy's experience, expertise and enterprise shall help tap the untapped hydrocarbons seated in unconventional reservoirs and produce them in a safe, responsible manner," Maheshwari noted.

Discussing the E&P outlook for India, Maheshwari said, "The Hydrocarbon Exploration Licensing Policy (HELP), which was announced by Government of India earlier in March 2016, is apposite and progressive to boost domestic production."

"Discovered Small Fields (DSF) being offered by our government, bidding for which closes end of October 2016, present a unique opportunity to the industry players to hunt for exploration upside whilst monetising the existing discoveries," he added.

However, in this present scenario, Essar Energy has decided to invest additional 1000 crore rupees in Raiganj (E) block to boost up CBM pumping from Raniganj (E) block, as world's one of the largest single stream urea plants and the first designed for CBM as the feedstock- Matix Fertilisers, located at Panagarh in WB's Burdwan district- will commence urea production using CBM from Essar's Raniganj plant in the third quarter of FY2016-17.

"Here, the exploration phase was started from April 2009 and pilot assessment phase was commenced in April 2012. Our development phase is currently ongoing and additional 700-1000 crore rupees will be invested in this field," Manish Maheshwari further added.

Besides Raniganj, Essar Group, owned by Ruia brothers- Ravi and Sashi Ruia, has high quality acreages of around 2700 sq. kms. for CBM exploration and production in India spread across the states of Odisha, Jharkhand, Madhya Pradesh and Chhattisgarh.

(Reporting by Deepayan Sinha)