Essar Oil & Gas Exploration and Production (EOGEPL) has obtained natural environment clearance for exploring shale gas reserves in its Raniganj block in West Bengal, an official claimed.
This follows the government’s decision to permit operators freedom to look into both conventional oil and natural gas along with non-conventional sources like coal-bed methane (CBM) and shale reserves within a exploration acreage.
Earlier, companies could possibly go exploring only oil and also natural gas or CBM based on their licence for the block.
The official stated the expert appraisal committee (EAC) in January 29 meeting permitted Essar to drill 20 wells to explore shale gas in its Raniganj CBM block.
This has been awarded an exploration lease for shale gas, CBM and hydrocarbons in the Raniganj block.
EOGPL has got authorization to drill 20 shale wells at a cost of Rs 10 crore. To begin with, it is going to drill five wells in the block to test the shale potential.
When contacted, company Managing Director and CEO Vilas Tawde stated: “We will begin off with gathering the data. For this purpose, we are going to should drill the coal, identify the sweet spot then simply drill horizontally for almost a km. Thereafter, we are going to analyse the coal, the shale, the strength of the shale, along with the required volume.”
“If this research is successful, we intend to drill around 220-250 wells that can require a great investment of Rs 7,000 crore,” he claimed.
EOGEPL has invested around Rs 4,000 crore in the Raniganj block, that will generate 1.7 million standard cubic metres per of gas from coal seams (CBM) within the next two years and ramp up to 2.5 mmscmd in the next three to four years.
With the policy for simultaneous exploration of exceptional resources in place, EOGEPL is looking into the shale prospect in the same blocks which can be in the range of 7.7 trillion cubic metres.
The official stated the company could spend up to $1 billion in growth and development of shale reserves in case the exploration programme was successful.
Essar has already authorized an agreement to sell whole production from Raniganj East CBM block to state gas utililty GAIL India Ltd.
Besides Raniganj CBM block, the company also has a Mehsana CBM block in Gujarat where it plans to drill 6 wells. The project is going to be finished in 18 months.