ONGC to give 10-25% stake in CBM blocks to Dart Energy
State-owned Oil and Natural Gas Corp (ONGC) will give 10 to 25 percent stake in its four coal-bed methane (CBM) blocks to Brisbane-based Dart Energy Ltd as it looks to expedite production.
New Delhi: State-owned Oil and Natural Gas Corp (ONGC) will give 10 to 25 percent stake in its four coal-bed methane (CBM) blocks to Brisbane-based Dart Energy Ltd as it looks to expedite production.
ONGC has finalised partners for producing gas from below coal seams, called CBM, in the Jharia, Bokaro, North Karanpur and Raniganj blocks, a company official said.
The company is farming out 35 percent stake in the four blocks to expedite gas production with the help of private sector firms. It had faced land acquisition problems and rig availability issues that has delayed production.
The official said Dart will get 25 percent in the Jharia, North Karanpur and Bokaro block while in Raniganj it will get 10 percent. In Raniganj, London-listed Great Eastern Energy Corp Ltd (GEECL) will be the lead partner with 25 percent interest.
CCLE, Prabha Energy and MMS would take 10 percent in Jharia, North Karanpur and Bokaro blocks, where Dart would be the lead partner, he said.
CBM is natural gas trapped within coal formations, which is extracted by drilling holes into the seams.
ONGC, which has so far spent about Rs 510 crore on the four blocks, had last year offered to give out up to 35 percent stake through a tender. However, the Oil Ministry asked the company to cancel the tender as only three players bid.
The company invited fresh international bids in November and has now finalised the farm-out arrangement, he said.
ONGC is the operator in the Raniganj north block with a 74 percent stake, while state-run Coal India Ltd (CIL) holds the remaining stake.
At Jharia, it holds a 90 percent stake, while CIL has 10 percent. At Bokaro and north Karanpura, it is the operator with 80 percent each. The remaining stake in the two blocks are held by state-owned Indian Oil Corp (IOC).
According to ONGC estimates, the Jharia block holds 85 billion cubic meters (bcm) of in place gas reserves. North Karanpura holds 62 bcm, Bokaro holds 45 bcm and Raniganj North holds 43 bcm.
Of these, the company has established 76 billion cubic meters of in place reserves and it is now awaiting regulatory approval for field development plan it had submitted recently.