Govt offers 15 CBM blocks in first bidding round in more than a decade

The government has offered 15 blocks for extracting gas from coal seams (CBM) in the first bid round in more than a decade. The blocks are located in Maharashtra, Madhya Pradesh, West Bengal, Jharkhand, Odisha and Chhattisgarh, according to a notice inviting offers put out by the Directorate General of Hydrocarbons (DGH).
Bids under the Special CBM Bid Round-2021 are due on February 20, 2022.

This is the first CBM bid round in more than a decade. The last round was held in 2010.

CBM is gas or methane found below coal seams in coal fields. It is similar to natural gas and can be used as fuel to fire power plants, run fertiliser units, or be used as CNG in automobiles.

The maximum number of five coal-bed methane (CBM) blocks have been offered in Madhya Pradesh, and two blocks each in Jharkhand, Maharashtra and Odisha. Three blocks are on offer in Chhattisgarh and one in West Bengal.

The government has awarded 29 CBM blocks in the previous four rounds of bidding.

"Companies are invited to bid for exploration, development and monetisation of 15 CBM blocks likely to contain both conventional and/or unconventional hydrocarbon resources, distributed in the sedimentary basins of India," DGH said.

All the 15 blocks are in Category-III basins that hold prospective resources to be explored and discovered.

India's sedimentary basins are divided into three categories -- Category-I are basins with reserves being produced and exploited, and Category-II are ones with contingent resources to be developed and monetised.

Under the current CBM round, bidders offering to do maximum exploration work will be awarded the block, DGH said.

The bid round is part of the government's attempt to raise domestic oil and gas production to cut reliance on imports.

India imports roughly 85 per cent of its oil needs and about half of the gas requirement.

Last month, the government offered 21 conventional oil and gas blocks for bidding in the sixth round under the Open Acreage Licensing Policy (OALP).

Bids under OALP-VI are due on October 6.

In parallel, the government has offered 32 small and marginal discovered fields. These were discovered by state-owned Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) but they could not develop them for a variety of reasons, including uneconomical size.

Now, 32 such areas have been offered under the third Discovered Small Field (DSF) round.

"Bid submission timeline of DSF-III (has been) extended till January 31, 2022," DGH said.

These are part of government efforts to more than double the share of natural gas in the country's energy mix to 15 per cent by 2030 from the current 6 per cent.

State gas utility GAIL (India) Ltd is adding around 15,000 kilometers of gas pipelines in east India to an existing network of around 17,000 km to form a national grid that will tie into city gas networks.