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GEECL plans to exploit shale worth $2.78 billion at its Raniganj (South) block
Great Eastern Energy Corporation Limited (GEECL), a London Stock Exchange-listed Indian coal-bed methane (CBM) producer, today announced a resource upgrade at its Raniganj (South) block in West Bengal, finding prospective shale resources with a discounted valuation of over $2.78 billion.
“We are delighted to report this significant uplift in the Original-Gas-In-Place for our Raniganj (South) block of up to 9.25 trillion cubic feet (TCF) and with an undiscounted value of $13.78 billion and a discounted value of $4.31 billion,” said Prashant Modi, managing director and chief executive officer at GEECL.
The company added that ARI, an independent petroleum evaluator, has conducted the assessment in accordance with the classification guidelines set out in the Society of Petroleum Engineer’s Petroleum Resource Management System.
According to the assessment done by ARI, the company’s flagship Raniganj block has an estimated shale resource of 6.63 TCF under a high estimate, 3.51 TCF under best estimate, and 1.40 TCF under low estimate.
Modi said that the government’s recent decision of permitting exploration and exploitation of all types of hydrocarbons including shale resources under the existing CBM contracts, prompted the company to explore shale reserves in its blocks.
He said that the company would first make the initial exploration programme followed by the pilot production of shale. He added that the initial capital investment would be marginal.
Modi further added that the company was taking a hit on account of stranded taxes arising due to exclusion of natural gas from the goods and services tax (GST) but added that the firm remains hopeful of the inclusion of natural gas in the GST.
“We believe that the shale gas resources can be explored and developed cost-effectively in tandem with our successful ongoing CBM development programme through the sharing of surface and other infrastructure facilities. We are currently planning the initial exploration programme for exploiting shale in our block, and will make a further announcement in due course when we commence the same,” Modi said in a statement.
The company plans to invest Rs 2,000 crore to complete drilling of the remaining 144 wells at its flagship Raniganj (South) license area.
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