India's CBM Aspiration Remains an Idea
India’s aspirations to establish CBM as a viable energy source remain more in the realm of an idea than a reality.
In a report published Wednesday, Hindus Business Line has said that unless there is a dramatic discovery of reserves, which does not appear very likely, there is little chance that CBM production would reach the promised 7.4 mmscmd a day in 2013-14, as was estimated by the Directorate General of Hydrocarbons (DGH) two years ago.
As in 2012-13, the country’s total methane production stands at approximately 0.32 million standard cubic m a day (mmscmd).
The DGH announced a huge prognostic reserve of 4.6 trillion cubic m of methane gas in the country’s vast coal fields, insiders in the CBM exploration sector allege a serious mismatch between such estimates and the reality, the newspaper report said.
While the DGH Web site suggests that only three blocks have been relinquished till May 2010, Hindu Business Line said that unofficial estimates point out that operators of at least one-third of the CBM blocks (out of 33) have either relinquished their interests, or have approached the regulator to relinquish interests, till date.
Insiders say operators in seven out of eight blocks awarded in the second round of bidding and four out of 10 blocks in the much-hyped third round (2006) have reportedly failed to establish viable reserves and preferred to forgo assets, after completion of phase-1 of the work programme.
Leaving aside claims on reserves, which have a direct bearing on the prospect of striking gas, one can discern a drop in investors’ interest in the last (fourth) round of bidding opened in 2009.
As against 54 bids received in the third round, the fourth round attracted just half, or 27 bids. Also noteworthy is the exit of a major player in the global energy sector, which failed in its CBM foray in India. Industry insiders blame the lack of quality assets vis-a-vis over-hyping of CBM potential, as a major spoiler of the business environment, the newspaper said.