New estimates value Essar gas reserves at $4 billion

March 5th, 2010 - 6:27 pm ICT by IANS  

Mumbai, March 5 (IANS) The Ruias-led energy major Essar Oil Friday said its coal-bed methane blocks actually contain about seven trillion cubic feet (tcf) of recoverable gas, over twice than earlier estimates, which industry values at over $4 billion.
“Essar’s exploration and production business is set to become a major wealth creator for Essar Oil. Based on the draft reports, we have recoverable resources of seven trillion cubic feet,” the company said in a regulatory filing.

The company had engaged international consultants to assess reserves in the oil and gas fields it holds, which were previously estimated to hold recoverable gas resources of about three trillion cubic feet.

According to the new estimates, Essar Oil’s Raniganj finds in West Bengal has about one trillion cubic feet of coal-based methane gas, while its Rajmahal block in Jharkhand has about 4.7 trillion cubic feet.

Additionally, the company’s offshore block in Nigeria holds an estimated 200 million barrels of oil equivalent resource, while its Ratna and R-Series fields in Mumbai High hold 160 million barrels of oil equivalent.

However, the deal for the Mumbai High finds has not been signed yet, the company said.

Essar also said it will start commercial production of gas from its Raniganj block in West Bengal by the second quarter. Peak production of 3.5 million cubic meters a day would be reached in mid-2013 and will last 20 years.

“The company has signed long term (gas sale) contract with two large industrial customers.”

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