Oil India has signed a contract for a special coal bed methane (CBM) block in the Singrauli coalfield. The state-run explorer called the Oil India CBM block deal a landmark return to CBM exploration.
About the block
The block covers 272.14 sq km. Also, the company expects coal seams at depths of 600-800 metres, with an average thickness of about 40 metres. Meanwhile, Oil India signed the revenue-sharing contract on 15 October. Petroleum Minister Hardeep Singh Puri attended the signing. In addition, the ministry’s secretary and the head of the Directorate General of Hydrocarbons (DGH) took part.
Why the Oil India CBM block matters
CBM is natural gas that sits inside coal seams. So it gives India a home-grown source of gas. That matters because the country imports much of its oil and gas. In addition, high import costs make domestic supply more valuable, as our analysis of Brent at $110 shows.
However, the company has not given a work plan, a budget or a production date. Next, watch for its drilling programme.
