The Hindu : Business : Contracts signed for CBM blocks

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Wednesday, Nov 08, 2006
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Contracts signed for CBM blocks

Special Correspondent

RNRL, REL with GeoPetrol sign deals for four blocks

ENERGY SECURITY: Minister of Petroleum and Natural Gas Murli Deora (second from left), releasing a souvenir with Dinsha Patel, Minister of State for Petroleum, at a function in New Delhi on Tuesday. M. S. Srinivasan, Secretary (P&NG), looks on. — Photo: V. V. Krishnan

NEW DELHI: The first commercial production from coalbed methane (CBM) blocks is expected to commence in 2007, Murli Deora, Union Petroleum Minister, said here on Tuesday.

Speaking to reporters on the occasion of the signing of CBM contracts here, Mr. Deora said 16 blocks had been awarded in the two previous rounds of auction. Results in some of the blocks had exceeded the government expectations and three operators had established in-place gas reserves of over six trillion cubic feet.

On cut in petrol and diesel prices, Mr. Deora said the government might consider a reduction only if the international crude oil prices fell below $52 a barrel. There was no prospect of an immediate cut in prices but the impact of the fall in global prices was being studied. A reduction can only be considered when all losses on fuel sales were wiped off.

The Petroleum Secretary, M. S. Srinivasan, said oil companies were only making a marginal profit on petrol as a result of the dip in world prices while continuing to incur losses on sales of kerosene, diesel and LPG.

He said that one billion dollars of investment was expected in exploration of nine coalbed methane blocks for which contracts were signed here on Tuesday. A consortium led by Anil Ambani group companies, RNRL (Reliance Natural Resources Limited) and REL (Reliance Energy Limited) with GeoPetrol signed production sharing contracts for four CBM blocks, where it committed to invest at least Rs. 100 crore in the first of the three phases of exploration.

Australia's Arrow Energy-led group, that included GAIL (India) Ltd, committed $500-600 million investment in 20 years in exploration of CBM in its three blocks. Coalgas Mart-Deep Industries joint venture signed the production sharing contract for two blocks.

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