The Union Petroleum and Natural Gas Ministry approved a provisional price of $5.25 per million British thermal unit (mBtu) of gas Essar Oil is producing from its Raniganj coal bed methane (CBM) block in West Bengal.
“We have received approval from the Ministry for a provisional gas sale price approval,” Essar Oil CEO and Managing Director Naresh Nayyar said here. The Ministry has approved a basic price of $5.25 per mBtu plus $1 per mBtu in transportation cost. At Raniganj, 33 wells are now producing about 35,000 standard cubic metres per day (mscmd) of gas.
He said the company planned to drill 500 wells to help output reach plateau of 3.5 mscmd in three years. The company has completed a 48-km Raniganj-Durgapur pipeline, which will help bring gas from the field to the industrial customers in Durgapur. “The field development plan for the Raniganj block that will allow Essar Oil to drill a total of 500 wells has also been approved. Commercial sales from the block are scheduled to begin in a few months post some statutory approvals,” he added. The company is investing about $500 million for producing gas from below coal seams.
The company on Monday reported a 78 per cent jump in net profit in the fourth quarter ended March 31, 2011, at Rs.321 crore on the back of record refinery throughput and higher margins. “This is a strong financial result driven by record refinery throughput of 14.76 million tonnes per annum and a healthy uplift of over 80 per cent in gross refinery margins (GRMs),” Mr. Nayyar said in a conference call.
For the whole of 2010-11, the net profit jumped to Rs.654 crore from Rs.29 crore in the previous year. “Demand for petroleum products in India is expected to continue to grow sharply and we remain focused on delivering our key projects, which in 2011 includes the first phase of our Vadinar refinery expansion,” he said.
