New Delhi, June 5: Great Eastern Energy Corporation Ltd, a pioneer in coal bed methane in India, plans to invest around $2 billion (Rs 15,000 crore) in shale gas exploration on its block of Raniganj South in West Bengal, said its CEO and CEO Prashant Modi.
“We want to recreate in shale what we did for CBM,” he said. “We pioneered the exploration, production and development of CBM in India.”
CBM (Coal Bed Methane) is a gas trapped under coal seams.
GEECL signed India’s first CBM contract for the Raniganj South Block on May 31, 2001. “We were the first to commercialize CBM in July 2007,” he said.
Previously, the company’s CBM block was under contract with Coal India Ltd. Since 1993. At that time, CBM had practically no presence in Asia and was still in its infancy in the world.
“We have huge shale resource potential of up to 6.63 trillion cubic feet (TCF) in our block,” he said. “We are awaiting the amendment of our oil mining lease for shale exploration by the government of West Bengal. After that, we plan to drill shale core wells to assess geological and other technical factors.”
Subject to the results obtained and analyzed on the cored wells, GEECL will drill pilot production wells. “Assuming the results obtained from the pilot production wells are in line with our expectations, the total investment envisaged in our shale program is approximately $2 billion, or Rs 15,000 crore,” Modi said.
On the fact that the government was considering levying a windfall tax on resulting higher revenues for oil and gas players due to high global energy prices, he said: “It will be very unfortunate and a disaster. for the oil and gas sector, if the government decides to impose such a tax.
Oil and gas prices depend on various factors, the main ones being supply and demand, geographic and geopolitical issues. “They go up and down like they do with other commodities and goods, which is supposed to be the ‘free market,'” he said.
“Where were the policy makers when oil turned negative and also remained in the USD 20-30 per barrel range for a long time? Companies bore the losses and many of them even went bankrupt,” he said. -he declares.
Oil prices are currently hovering above USD 110 per barrel.
“Such a tax (bonus) will only discourage national investment in this sector and thus increase imports which are already at 85% (oil) and 50% (gas). This will penalize domestic producers and incentivize international producers. It must be understood that oil and gas exploration is a very risky capital activity. The whole investment can be wiped out if commercial quantities of hydrocarbons are not found,” he added.
Regarding the inclusion of natural gas in the Goods and Services Tax (GST) regime, Modi said, this is a long-standing request from the industry.
When the “one nation, one tax” scheme was introduced in 2017, five commodities – crude oil, gasoline, diesel, ATF and natural gas – were excluded from its scope for the time being. This meant that the central government and the states continued to levy excise duty and VAT respectively on these products. More importantly, businesses are unable to offset the GST paid on inputs against the tax paid on the final product.
“This not only discourages consumers, but also producers due to the cascading effect on costs, as GST and VAT cannot be offset. Having natural gas under GST will go a long way to further increase investment in this sector and thus help reduce our hydrocarbon imports and achieve a 15% gas share in India’s energy mix,” he added.
Environmentally friendly natural gas currently accounts for 6.7% of all primary energy consumption in India. (PTI)