Essar Oil & Gas bags five CBM blocks across three states, adds 1,281 sq km to acreage

Essar Oil & Gas said it has won five coal bed methane (CBM) blocks across West Bengal, Madhya Pradesh and Telangana, adding around 1,281 square kilometres to its exploration acreage as the company looks to expand domestic natural gas production. The blocks, awarded under the government's Special CBM (SCBM) bid rounds of 2025 and 2026, hold an estimated 6.6 trillion cubic feet (TCF) of gas-in-place resources, the company said in a statement on October 15. The contracts for the SCBM-2025 and SCBM-2026 Bid Rounds were formally signed on October 15, at a ceremony chaired by Shri Hardeep Singh Puri, Minister of Petroleum & Natural Gas, Government of India. The expansion includes two blocks in West Bengal's Raniganj region, covering around 330 sq km, expanding the company's existing Raniganj East acreage from around 500 sq km to approximately 830 sq km. Essar Oil & Gas has also secured a block in Madhya Pradesh's Singrauli basin, an established CBM region, and two blocks in Telangana's Godavari Valley, marking its entry into a new geography. The company expects the proximity of the new blocks to its producing asset to create synergies and support the development of an integrated CBM field that it expects to become India's largest. The company currently produces around 950,000 standard cubic metres of gas per day (SCMD) from its Raniganj operations, accounting for nearly 50 per cent of India's CBM production, according to the statement. It has invested more than Rs 6,000 crore in exploration and production at the asset. The company aims to contribute 5 per cent of India's total natural gas production by progressively developing its CBM portfolio and unlocking additional domestic resources, according to the statement. "The award of these five CBM blocks marks a significant milestone in Essar Oil & Gas' growth journey and reinforces our commitment to unlocking India's vast unconventional hydrocarbon potential," said Pankaj Kalra, chief executive officer of Essar Oil & Gas. The company will focus on translating the expanded acreage into production growth, leveraging its technical expertise and existing infrastructure, Kalra said. The expansion comes as India seeks to increase domestic gas production and reduce its dependence on imported supplies. Around half of the country's natural gas consumption is currently met through imports, according to the company. Natural gas is expected to remain an important part of India's energy mix as demand grows, Bhuwan Chandra Tripathi, chairman of Essar Oil & Gas and operating partner for energy at Essar Group, said. CBM is an unconventional natural gas resource found in coal seams. Its extraction involves removing water from coal seams to reduce pressure and release the gas trapped within them. India has identified CBM as a potential source of domestic gas supply, although commercial development depends on factors such as reservoir characteristics, production economics, and supporting infrastructure.