Greka to Commence Drilling at Essar's India CBM Block Next Month

Greka Drilling Limited will begin drilling at Essar Oil’s India coal bed methane block next month.

Essar has issued the mobilisation order and Greka has initiated mobilisation of two drilling rigs. Essar is the largest producer of coal bed methane in India, principally from the Raniganj East block in state of West Bengal, which is the contract area for Greka Drilling.

“Greka Drilling’s high quality semi-automated GD75 rigs, that are already situated within country, will drill both vertical and directional wells on a day-rate basis (rather than a metres drilled basis). The Company is also in discussions with other CBM developers in India with a view to assisting them in monetising their gas resources and it is positive to see that the Government of India remains committed to the development of CBM as a major source of domestic clean energy,” Randeep S. Grewal, Chairman & CEO of Greka Drilling, commented.

Greka and Essar signed the contract in January this year. Essar had previously engaged Greka Drilling in late 2013 to provide drilling services on Raniganj East block and this contract was concluded in 2015 with a total of 16 wells being drilled.  The current contract is for a period of one year and has an estimated value of around $8 million.

The Indian government is looking to aggressively exploit country’s coal bed methane reserves to augment domestic gas supplies. Despite lot of talks and discussions about the sector, there has not been much progress. Private sector players say that large scale exploration is not economically viable at prevailing domestic prices.

The government, however, has expressed willingness to talk to the companies about the pricing issue.