Essar Oil Ltd (EOL) on Friday announced more than doubling of its gas reserves to 7 trillion cubic feet (tcf) from 3 tcf. At current prices, the value of these recoverable gas reserves stand at over $4 billion (Rs 18,400 crore).
“Essar’s exploration and production business is set to become a major wealth creator for Essar Oil,” the company said in a filing to the stock exchanges.
Speaking to Hindustan Times, Shishir Agarwal, executive director, Essar Oil, said the revised recoverable reserves have been certified by renowned international consultants Netherland Sewell and Associates Inc and RPS Energy and Advanced Resources of US.
“The consultants have certified an aggregate in-place gas resources below coal seams in the three coal bed methane (CBM) blocks of 15 tcf and recoverable CBM resources of around 7 tcf in its Raniganj, Rajmahal and Mehsana blocks.”
Essar Oil’s share prices rose 3.4 per cent to Rs 140 on the National Stock Exchange on Friday after the announcement.
Essar’s Ranigang block in West Bengal, situated in the country’s oldest coal mining zone, has in-place resource of 4.6 tcf and recoverable resource of around 1 tcf.
The company had stated in 2009 that it plans to drill 500 wells over the next three-four years to produce 3.5 mmscmd of peak gas output from Ranigang CBM block.
Essar’s Rajmahal block in Jharkhand, where Essar has been declared the provisional winner in the recently-concluded auction of CBM areas, holds recoverable resource of 4.7 tcf. The Mehsana CBM block holds 0.75 tcf of gas reserves.
Essar Oil’s offshore block in Nigeria holds an estimated 200 million barrels of oil equivalent resource, while its yet-to-be-signed Ratna and R-Series fields in Mumbai High hold 160 million barrels of oil equivalent.