Essar Oil & Gas gets environment nod to begin shale gas exploration in Raniganj

Finally, Shale gas revolution is coming to India. ONGC drilled the first hole in 2013 near Jambusar, Gujarat. Now, Essar Oil & Gas Exploration and Production (EOGEPL) is set to begin exploring shale gas reserves in its Raniganj block in West Bengal.

All thanks to Hydrocarbon Exploration Licensing Policy (HELP), which allow operators freedom to explore both conventional oil and natural gas as well as non-conventional sources like coal-bed methane (CBM) and shale reserves within an exploration acreage. Previously, companies could explore only oil and natural gas or CBM depending on their license for the block.

Shale gas has abundant reserves around the world, which may be sufficient to meet the demand for clean energy for many years to come. Shale gas is found in unconventional reservoirs typically trapped in shale rock, having low permeability, originally deposited as clay and silt. This makes it more difficult and more expensive to extract because of the high upfront costs. Shale gas is generally found at 2000 to 5000 meters below the earth’s surface unlike conventional natural gas – trapped in sandstone rock having high permeability and can be easily assessed to be produced by traditional vertical drilling, found at 1500 meters.

The expert appraisal committee (EAC) in January 29 meeting allowed Essar to drill 20 wells to explore shale gas in its Raniganj CBM block. It has been awarded an exploration lease for shale gas, CBM, and hydrocarbons in the Raniganj block. EOGPL has got approval to drill 20 shale wells at a cost of Rs 10 crore. To start with, it will drill five wells in the block to test the shale potential. If this exploration is successful, the company would drill around 220-250 wells that will require an investment of Rs 7,000 crore.

EOGEPL has invested around Rs 4,000 crore in the Raniganj block, which will produce 1.7 million standard cubic meters per of gas from coal seams (CBM) in the next two years and ramp up to 2.5 MMSCMd in the next three to four years.