India's Reliance Industries Seeks Pricing Freedom for CBM

Reliance Industries (RIL) wants complete freedom to market and price coal bed methane in India.

India’s biggest private sector company is looking to start coal bed methane production from its Sohagpur (West) block in Madhya Pradesh in FY17.

According to Financial Express, a business daily, RIL wants the government to roll out the marginal fields policy for the CBM blocks.

The Indian government last year introduced the revenue-sharing and uniform licensing models for 69 marginal fields. Of these, 67 fields would be put up for auction on May 25. The developers of these fields will benefit from ‘market-determined prices’ sans any government interference. Moreover, the bidders for marginal fields are given the right to sell gas to customers of their choice, unencumbered by the government’s allocation policy.

Country’s oil minister Dharmendra Pradhan met with coal bed methane producers on Wednesday to take stock of the progress in the industry. He tweeted that in 2017 about 5 percent of total gas production would be made up of coal bed methane.

In addition to Reliance, other private sector companies active in coal bed methane exploration are GEECL and Essar Oil. Currently the latter two hold blocks with active gas production.