Indian Energy Firms Seek Clarity in CBM Policy

Indian government has asked the petroleum secretary to prepare a note on best practices for the sector in areas where oil and gas finds overlap as energy firm involved in extracting coal bed methane (CBM) demand a single operator for CBM blocks.

The Financial Express has reported that ONGC has told authorities that issue of “single operatorship” has assumed prime importance as there are blocks where both oil and CBM reservoirs are barely within 100 metres of each other.

This issue has surfaced as coal and oil ministries are locked in a turf war on the mining rights to be granted to the operators.

While the coal ministry is in favour of giving away rights to CBM blocks to coal mining companies, the petroleum ministry has argued that the business of gas allocation and marketing is within its purview, the newspaper reported.

The issue of gas pricing also needs to be looked into and taken up expeditiously.

The Committee also recommended that state-run Coal India should be awarded CBM blocks within their leasehold area on a nomination basis, and that the company would invite bids from private players for its development in line with the existing CBM policy.

On similar lines, ONGC would be awarded CBM blocks in its leasehold areas but would have to invite bids from the private companies for their development with preference for existing operators, the panel suggested.

The move to set up the committee has come amid reports that oil ministry has found a wide variation in CBM prices offered by Reliance Industries and Essar.