(LiveMint)
Essar Oil and Gas Exploration and Production Ltd is planning to sell as much as 30% in its flagship coal-bed methane (CBM) block in Raniganj, West Bengal, said two people familiar with the development. Essar Oil, which completed the $12.9 billion sale of its refining and distribution business to a consortium led by Russia’s Rosneft PJSC last August, operates the coal-based methane business and a refinery in the UK. “Essar Oil and Gas Exploration and Production is looking for partners in the CBM field and thus offering up to a 30% stake,” said a senior Essar Oil executive, who did not wish to be named. He declined to disclose details.
The Raniganj CBM field could be valued at $2 billion according to energy consultants, and selling a 30% stake could rake in $ 600 million for the company. In an emailed response, a spokesperson for Essar Oil said: “We categorically deny the assertions made.” Essar is currently producing close to 1 mmscmd (million metric standard cubic meters per day) of gas from about 350 wells in Raniganj. It aims to double the output by the end of this year and sustain the level for the next few years.
The second person cited above said Essar Oil may use proceeds from the potential stake sale to expand its CBM operations. The Raniganj (East) block has sizeable CBM reserves with 25-30 years of field life. For the offtake of the increased gas production, Essar said it already has the required partnerships with customers.
