Date:05/07/2009 URL: http://www.thehindubusinessline.com/2009/07/05/stories/2009070550680200.htm

Essar may pick up operating stake in GSPC’s Gujarat block

Pratim Ranjan Bose

Kolkata, July 4

Essar may pick up operating stake in GSPC’s Barmer-Sanchor block (BS(3)-CBM-2003/II) in Gujarat, according to sources.

ONGC, the previous operator of the block spread over 790 sq km, decided to relinquish its interests in the exploratory asset in 2008, after drilling eight core holes and two test wells.

GSPC had approached the Ministry of Petroleum and Natural Gas seeking permission to retain the block and to scout for a new operating partner.

On receipt of the permission, the Gujarat Government PSU had invited expression of interest from experienced CBM players in March-April.

Essar Exploration and Production Ltd, a wholly owned subsidiary of Essar Oil, emerged as the sole bidder for the project.

“Essar has submitted a firm proposal to pick up an operating stake in the block. The bid is currently under evaluation,” GSPC official sources confirmed Business Line.

Sources, however, said that GSPC would shortly request the Ministry to allow it to include Essar as an operating partner in the CBM project.

Essar officials are tight-lipped about the development.

CBM reserves

It may be mentioned that the previous ONGC-led consortium located methane reserves in a mixture of lignite and sub-bituminous coal reserve 1,200 metres to 1,600 metres underground.

According to industry sources, the deep location of the CBM reserve coupled with low methane content in the lignite and sub-bituminous coal reserve poses serious challenge before commercial viability of the project.