CBM explorers assured of fast passage to India

AS INDIA gears up to start commercial production of coalbed methane in 2007-08, the Indian Government is seeking bids from potential CBM explorers around the world to open up new hydrocarbon opportunities.
CBM explorers assured of fast passage to India CBM explorers assured of fast passage to India CBM explorers assured of fast passage to India CBM explorers assured of fast passage to India CBM explorers assured of fast passage to India


Staff Reporter

The initiative is part of a major drive to meet India’s rapidly growing energy demand, which is being partly driven by massive economic growth in the region.

At a roadshow in Brisbane yesterday, Indian government officials painted a picture of one of the world’s fastest growing economies that is highly ranked as an attractive business destination. In 2006, GDP growth is expected to be over 8% and hit double-digit growth in the next two to three years.

At present India produces around 100,000 megawatts per annum and to meet demand this needs to increase to 212,000MW by 2012. Coal is the dominant source of India’s energy and will continue to supply around 50% of the country’s energy needs until at least 2020. By then India will need to import coal to meet anywhere from 0% to 48% of the country’s needs, depending on how much coal production capacity can be brought on line in the timeframe.

Oil and gas share of the energy mix will increase and India is particularly keen to encourage growth in the fledgling CBM market with the help of international companies, partly it would seem because the sector is not yet highly regulated and controlled.

India’s large coal resources are believed to host 162 trillion cubic feet of coalbed methane resources. The resources are hosted in thick, high density coal seams, with favourable permeability and good thermal maturity. As much as 62% of India’s known coal bearing areas are unexplored for CBM.

Some 16 blocks were awarded in earlier bidding opportunities, covering 7800 square kilometres and with a resource of 820 bank cubic metres. To date the exploration commitment on those blocks totals 121 core holes and 211 test/pilot wells, with an investment of $US150 million.

Australian drilling company Mitchell Drilling has been conducting contract drilling in India for the last three years, on behalf of Reliance Energy. To date Mitchell Drilling has drilled 27 exploration wells at 1000m depths and has developed 10 production wells.

Speaking at the roadshow, company chief Nathan Mitchell said CBM drilling in India had been very successful but some challenges included a lack of resources related to services such as gas absorption and geological testing, and supply of equipment. The company has just set up its own service group called Integrated Exploration Solutions to fill exactly this need and offer CBM customers in India access to necessary services.

Mitchell said a major positive of working in India was access to a highly educated workforce.

Indian officials assured the oil and gas explorers present at yesterday’s roadshow that a faster approval mechanism had been put in place that would allow the blocks to be awarded by October 2006.

“I would like to specially say that an endeavour has been made to give operational freedom to the companies, reduce the number of approvals and streamline procedures and processes,” said Dinsha Patel, India’s Minister of State of Petroleum and Natural Gas.

“We have tried to continuously improve our terms and provide clarity in our contracts while maintaining complete transparency in our entire bidding process.”