Essar Oil & Gas wins five CBM blocks across three states, adds 6.6 Tcf gas reserves

New Delhi: Essar Oil & Gas Ltd has secured five coal-bed methane (CBM) blocks across West Bengal, Madhya Pradesh and Telangana, adding about 1,281 square kilometres of acreage and an estimated 6.6 trillion cubic feet (TCF) of gas-in-place resources as it seeks to expand domestic natural gas production.

The contracts, awarded under the government's Special CBM (SCBM) bidding rounds of 2025 and 2026, were signed on Thursday, the company said in a statement.

The expansion strengthens Essar's existing operations in West Bengal's Raniganj region, adds to its presence in Madhya Pradesh's Singrauli basin and marks its entry into new CBM areas in Telangana's Godavari Valley.


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Two new blocks in Raniganj, covering about 330 square kilometres, will expand the company's acreage in the region from around 500 square kilometres to about 830 square kilometres.

Their proximity to its existing producing asset is expected to generate infrastructure and operational synergies, helping develop an integrated CBM-producing field that the company expects to become India's largest.

The Singrauli block offers opportunities to leverage the existing CBM ecosystem in Madhya Pradesh, while the Telangana blocks will allow the company to apply its exploration and production expertise to a new resource region.

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"The award of these five CBM blocks marks a significant milestone in Essar Oil & Gas' growth journey and reinforces our commitment to unlocking India's vast unconventional hydrocarbon potential," Pankaj Kalra, chief executive officer of Essar Oil & Gas, said.

"Building on our proven track record at Raniganj, we see substantial opportunities to leverage our technical expertise, operational capabilities and established infrastructure to accelerate the development of these resources," he said.

Essar Oil & Gas has invested more than Rs 6,000 crore in exploration and production at Raniganj and currently produces about 9,50,000 standard cubic metres of gas per day (SCMD), accounting for nearly 50 per cent of India's CBM production, according to the company.

Its broader ambition is to contribute 5 per cent of India's natural gas production by progressively developing its CBM portfolio and bringing additional domestic resources into production.

"Natural gas will continue to play an important role in India's energy mix as energy demand continues to grow," Bhuwan Chandra Tripathi, chairman of Essar Oil & Gas and operating partner - energy at Essar Group, said.

"As a Group, we remain focused on supporting India's energy security through responsible development of domestic hydrocarbon resources, while contributing to the country's transition towards a more balanced and sustainable energy mix," he said.

The expansion comes as India seeks to boost domestic gas supplies and reduce dependence on imports. Around half of India's natural gas consumption is currently met through imports, making the development of indigenous resources an important part of its energy security strategy, the company said.

Coal-bed methane is natural gas trapped within coal seams and extracted through dedicated production wells. Its commercial development can help diversify domestic gas supplies, although actual production depends on reservoir characteristics, recovery rates, infrastructure and development costs.

Essar Oil & Gas, formerly known as Essar Oil and Gas Exploration and Production Ltd, has more than 25 years of experience in CBM exploration and production. The company says it has a resource base of 12 TCF of CBM and shale gas and has produced more than 105 billion cubic feet of CBM to date.

The new awards form part of the government's efforts to unlock India's unconventional hydrocarbon potential, attract investment in exploration and production, and strengthen domestic energy supplies.