Development of the Indian Coalbed methane...

Development of the Indian Coalbed methane resources

– Challenges and issuesInternational Workshop on “Development of Coal based Non-conventional

Energy Resources in India” at CMPDI, Ranchi,12th - 13th November 2013.

N. K. Punjrath,GM - Block Manager

CBM Development Project, ONGC

Bokaro Steel City

22 #2 E&P Company in the world

Presentation Overview

1 Overview of Indian CBM scenario

2 Challenges and Issues

6 Take home

4 Socio economic Challenges

5 Government/ Policy Issues

3 Technical Challenges


CBM – Indian scenario

• 3rd largest proven coal reserves and 4th largest coal producer in the world

• Total coal resource of India is almost 300 BT and the mining industry over 2 centuries old

• Prognosticated CBM resource is around 4.6 TCM.

• India is a relatively newcomer to the CBM E&P industry

• CBM ‘R&D’ commenced in the early nineties and companies like ONGC, ESSAR, RIL and GEECL, initiated quest for CBM in India – early ‘90’s

• CBM Policy of GoI formulated in 1997 and first award of CBM Blocks in 2001

4A FORTUNE Global 500 Company

• 33 CBM Blocks thru’ 4 bidding rounds including 3 by nomination.

• Total CBM Resource awarded ~ 1.5 TCM

• 8 major PSU and Pvt O&G Operators

• 20 Blocks Active

Operator Blocks

ONGCONGC 44

ONGCONGC--IOCIOC 22

ONGCONGC--CILCIL 22

ONGCONGC--GSPCLGSPCL 11

RIL 5

ESSAR OIL 5

GEECL 2

Arrow 5

B P 1

REL – RNRL 4

Coal Gas Mart -Deep Inds

2

CBM BLOCKS AWARDED IN INDIA

55

Title of the slideMethane for thought

� Almost two decades of CBM Exploration

� Total CBM production is just 0.35 MMSCMD

� Realized from 2 nomination Blocks and 1 of CBM Round I

� Major contribution from GEECL’ s Raniganj Block (~0.25 MM)

� Blocks awarded post 2001, still not on Commercial production

� Even the 3 ‘producing’ Blocks are under ‘incidental

production’

� Ideally CBM round I – III Blocks should have been under Production

66# 21 Energy Company in the World

Title of the slideMethane for thought …..

� Contracted Phase I & II of most Blocks < 7 years

� Total 3 years extensions can be availed on various accounts in addition to dispensations (Statutory clearances, Force

Majure etc.)

� Most Operators completed exploration work with extensions/ dispensations

� Monetization of national CBM resources delayed as Operators face diverse Challenges and Issues

� Do we have a solution ?? Lets attempt to diagnose ……

77

Challenges and Issues

� USA - Mother of CBM Industry

� Taking cue from the US success ambitious CBM programme launched in India

� Wide spectrum of challenges confront the Indian CBM sector, which can be grouped as

� Technical,

� Socio economic and

� Government/ Policy issues.

8# 21 Energy Company in the World

Title of the slideChallenges – TECHNICAL TECHNICAL

� Geological complexity of our Gondwana basins, multiple seam set-up

9

• Geological heterogeneity and complexity

• Long stratigraphic column

• Depth

• Abrasive formations

• Multi seam drilling and completions is a compulsion on account of:

• High resource concentration • LAQ issues – inclined wells/ HMMWs

• Reservoir modeling

• Production testing

• Lift (Pump) selection – wide range of dewatering

Challenges – TECHNICAL TECHNICAL

10

� Lack of infrastructure and CBM specific technology

� CBM E&P requires completing scores of wells in a short time frame for viability

� Drilling rigs, HF units and completion equipment availability and deployment

� Most of above can be addressed by the Operators through experience, learning and global service providers.

� ONGC itself in the process of farming out to mitigate Technical, Technological and infrastructure issues.

Challenges – TECHNICAL TECHNICAL

11

Challenges - SOCIO ECONOMICSOCIO ECONOMIC

� Most CBM acreages in Frontier and economically backward areas

� CBM Projects initially require large scale activity

� Large number of land pieces within a small area,

� large volumes of water for drilling and hydrofracturing,

� large scale vehicular movement,

� effluent disposal

� ….. and thus Local factors/ forces come into play.

� Socio economic challenges although not so apparent, can make or marmake or mar a CBM Project. Some of these are:

# 21 Energy Company in the World

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� Land Acquisition

� Deficient land records and fragmented ownership.

� Encroached GM land - Gair Majarua lands, encroached by villagers for cultivation. Even after obtaining possession from Govt. Operators face local unrest for want of compensation.

� Tribal land - Tribal land falling in operational areas. Acquisition possible only through State Govt.

� Encroached Forest Land - Clearance from MoEF & possession through State Govt.

� Commercial rates for land - Irrespective of type / category of land, including waste land, impacts project economics.

� Implementation of CNT Act - Acquisition through direct negotiation not possible. All acquisitions through Govt. only.


A FORTUNE Global 500 Company

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� Most CBM acreages fall in inhabited areas

� This scale of activity is unprecedented in the area

� Lack of awareness in the local populace

� Local non-cooperative/ hostile environment

� Compensation and employment issues

� CSR and local awareness programmes

� Intense support of Local Authorities and Government required


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Issues – Government and PolicyGovernment and Policy

• CBM blocks were carved out jointly by MOC & MOP&NG wherein the coal mining was not considered to take place for a considerable time. Three categories of areas were identified

• “Yes Areas” were identified for CBM where for a ‘foreseeable future’there was no possibility of mining; i.e. up to 2035.

• “No Areas” were areas where no CBM is possible due to the fact that these areas are either under active mining or may be mined in future.

• “May be areas” were areas where CBM activities may be possible after some time once it is ascertained that coal mining might not take place in future.

• Most CBM blocks offered were from ‘Yes Areas’

Overlapping – an area of major concern

Most valuable Indian PSU

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� Subsequently, GoI decided to allocate captive coal mining blocks to tide over the energy crisis

� Such allocated blocks in many cases overlapped with the already allotted CBM Blocks

� Even overlapping of infrastructural project with CBM block exists

� All ONGC CBM blocks have overlapping issues


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Issues – Government and Policy Government and Policy –– Overlap Overlap

850

850

850

850

850

230

230

230

230

230

00/

05/

55/

55/

50/

50/

45/

10/

15/

20/

850

850

850

850

850

00/

05/

10/ 15

/20

/

N

Nedhiya Nala

D um

au

ha

na

i Nl

Pakw

a N

ala

Cha

traH

azaribagh

HAZARIBAGH DIST. (297.5 km )2

CHATRA DIST. (42.5 km )2

Horhori

Na di

230

45/

0 1 2 3 4 5 KM.KM.

SCALE

Drawn by: Drawing Section, RCC, ONGC, Kolkata Prepared by: CBM Block, ONGC, Kolkata

Haharo

Na

di

Ga

rhi N

a

d

i

Ghaghr a Nadi

B ada

amh i Nadi

Shr

ro

ama

lNa a

S aad bh Nala

To

Bu

nduTo He

ndegir

To Kalya

npur

To Raham

To

Basr

iya

To

Ha

jar i

bag

h

To Badam

To

Hendeg

ir

AMBATOLI

BARADIH

MBA-11

KBM-7

KBM-12KBM-10

KBM-17

MRUH-8

BATUKA

KARMATANR

MANDAR

KBU-1

KT-8

KT-6

TANDWA

PETO

KARALI

KERENDARIK-20

K-11

K-12

GARRIKALAN

DARIKALAN

LANGATU

SIKRI BARKAGAON

BISRAMPUR

NAWATANR

K-5

K-13

K-21

KB-21

KB-5KB-4

KB-12

KBM-25 KBM-9

KBM-27

MRA-9

BADAM

MBA-1

KBM-18

KBM-14

MBA-2 MBA-3

MBA-6

MBA-10ISKO

KRU-6

KRU-4

KRU-5

KRH-7KRH-7

MRUH-2

MRUH-15

KRH-13

MRUH-14

MRUH-18

MRUH-9MRUH-12

KRH-1

MRUH-17

RONHE

MRUH-7

KOELANG

MRUH-16 MRUH-4KRH-4

MRUH-5

MRUH-3

MRUH-1MRUH-6

NAPOKHURDKRU-2

MBA-7KRU-1

KRU-3

MBA-8

KBM-30

MBA-5KBM-28PUNDAUL

KBM-15

KB-10

KB-23

K-24

JAMIRA

K-8

NKAA

NKSH

NKSF

NKSI

NKSA

NKSB

NKSC

NKSI (A)

NKAB

D

E

A

B

C

NKSD

NKSG

NKSE

NKAC

NKAE

NKAF

NKAG

NKAD

INDEX

Borehole Location

Corehole Location

Exploratory LocationONGC

NK CBM Block Boundary

Other Agency

ONGC

Road

River/Nala

District Boundary

Forest Area

Released PilotLocation

Fig 4

N. Karanpura CBM BlockN. Karanpura CBM BlockNTPC Coal Block

Jharia CBM BlockJharia CBM Block

ECL Coal Block

Bokaro CBM BlockBokaro CBM Block

MMTC Coal BlockTATA Coal Block


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Overlapping in Raniganj CBM Block

Overlapping area awarded to

Block Name

WBMDTC 1. Kulti Coal Block 2. Icchapur Coal Block 3. Sitarampur Coal Block

Consortium of 5-6 pvt. companies

4. Moira-Madhujore Coal Block

Bengal Aerotropolis Project Ltd. (BAPL)

5. Airport city


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• Overlapping of coal mining blocks is common to all ONGC’s CBM Blocks.

• Invariably coal-mining blocks were awarded much later than award of CBM Blocks.

• Coal blocks generally overlap with the prime prospective areas of CBM.

• Feasibility of simultaneous coal mining and CBM activity in the same areas has been examined and the same is not practical.

• Coal Block operators working in the CBM acreages lead to LAQ constraints in addition to legal, technical and logistic issues.

• CBM Development Plans may not be viable with overlapping.

Most valuable Indian PSU

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� Statutes of India do not permit multiple leasing for different minerals in the same area as all mining rights in a vertical column belong to party having the surface lease

� Under the circumstances concurrent exploitation of coal and CBM not possible without change of the statute

� Internationally CBM recovery is ahead of mining

� Regulations exist in USA & Australia for pre-draining of Methane ahead of mining.

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• Government of India (GoI) formulated the CBM Policy encompassing the lucrative terms and fiscal packages of other global CBM Policies.

• Subsequent to award of the acreages the Operator has to seek licenses and statuary clearances from other departments of the Government and from the State Govts., Forest and Environment Clearances from GoI and State of operation.

• PEL/ PML grant normally done at State level in most States. In Jharkhand it is at District level. All Blocks fall in more than one District.

• No single-window for redressal or pre-approvals are available, operations are often delayed or stalled as the Operator runs from pillar to post.


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� Need for CBM specific safety regulation (DGMS)

� Progressively stiffer fiscal and regulatory norms in successive Bidding Process

� Upcoming unified NELP

� CBM is a front loaded, marginal economics play and Government also needs to hold hands of the Operator in this journey to achieve the ultimate goal of monetising the Indian CBM resources

Take HomeTake Home:

ONGC a Wealth Creator

Thank You

MAP OF JHARIA BLOCK WITH PROPOSED DEVELOPMENT ANDASSESSMENT WELL LOCATIONS

MAP OF PARBATPUR AREA SHOWING MAP OF PARBATPUR AREA SHOWING

HABITATION, FOREST, VACANT LAND, HABITATION, FOREST, VACANT LAND,

OVERLAPPING AREA AND DEVELOPMENT OVERLAPPING AREA AND DEVELOPMENT

WELLSWELLS

CBM BLOCKS HELD BY ONGC CBM BLOCKS HELD BY ONGC

Sl. No. Block Name State Area(Sqkm) Resource Awardee Remarks

I. Nomination Basis

1 RANIGANJ (NORTH)

West Bengal 350 43 BCM ONGC-CIL FDP submitted (05/10/2012)

2 JHARIA Jharkhand 85 85 BCM ONGC-CIL FDP submitted (24/08/2012)

II. Through Bidding

3 BK-CBM-2001/I Jharkhand 95 45 BCM ONGC-IOC FDP submitted (26/11/2010)

4 NK-CBM-2001/I Jharkhand 340 62 BCM ONGC-IOC FDP submitted (25/07/2011)

5 SK-CBM-2003/II Jharkhand 70 30.5 BCM ONGC Relinquished

6 NK(W)-CBM-2003/II

Jharkhand 267 43.6 BCM ONGC Relinquished

7 BS(3)-CBM-2003/II

Gujarat 790 87.2 BCM ONGC-GSPCL

Relinquished

8 ST-CBM-2003/II Madhya Pradesh

714 29.3 BCM ONGC Relinquished

9 WD-CBM-2003/II Maharashtra 503 19.9 BCM ONGC Relinquished


CBM BLOCKS OF ONGCCBM BLOCKS OF ONGC

Overlapping & Horizontal Drilling

�Horizontal drilling in the deeper seams from outside the

mining area may emerge as a method for simultaneous exploitation of both the resources

�However, this technique is yet to be proven, though

horizontal drilling for enhancement of CBM recovery is

established

�Proprietary technology with slight variation by different

Companies used in United States, Australia, Canada and China for its superiority over drilling of large number of

vertical wells

� 8 wells per section on 80 acre spacing

� 5 to 50 meters of coal exposure per well (thickness of each coal seam)

� Complex gathering system

� Larger environmental impact

� Many pumps

� Logistics: rig moves, etc.

Vertical wells – the standard technique for CBM

The alternative – horizontal, multilateral wells

� 1 to 2 wells wells per section

� Simpler gathering system

� Low environmental impact

� Fewer pumps

� No hydraulic fracturing

� Up to 5,000 meters of coal exposure per well

� Higher productivity well: up to 10x to 20x vertical well rates

Development of the Indian Coalbed methane...

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