At a time when explorers such as ONGC, Oil India, RIL and BP are wary over the deferment of the new gas price regime, CBM producer Great Eastern Energy Corporation (GEECL) is not impacted.
This is because the government in 2008 had approved a minimum selling price of $6.79/mBtu for gas drilled out from its Raniganj (South) fields and it is selling at more than $10/mBtu, said an official.
GEECL, the first company in India to commercially produce CBM, sells around 0.30-0.35 mmscmd to customers in West Bengal. The block has 2.44 tcf of estimated gas in place. Moreover, according to the production-sharing contract (PSC), the new Rangrajan formula-based pricing regime would not be implemented to the firm’s Raniganj (South) field as it already has a pre-approved price, the official added.
Yogendra Kumar Modi, executive chairman and managing director, did not respond to the queries sent by FE asking if the new gas price regime would cover GEECL asset.
GEECL has another CBM block in Mannargudi in Tamil Nadu with 0.98 tcf of reserves and also holds stake in Raniganj (North) block in a joint operatorship with ONGC. However, another CBM producer Essar Oil said the new price mechanism will apply to the company’s CBM production from Raniganj block.
“There is a mechanism for sale of incidental gas until commercial production commences, which provides for a floor or $6.79 / mmbtu, to ensure maximising revenue to the government for this incidental gas,” said Essar Oil spokesperson. Essar is producing over 120,000 scmd and plans to reach plateau production of 3 million scmd next year from its block in West Bengal.
The ministry of petroleum is reviewing production-sharing contracts for CBM players and would take a view on this, said a senior ministry official. The Gurgaon-based GEECL is planning an IPO to mop up about Rs 300 crore. The firm will use the proceeds from IPO to drill another 140 wells at Raniganj (South).
Siddhartha P Saikia