ONGC offloads stake in coal bed methane blocks

State-run energy explorer Oil and Natural Gas Corporation (ONGC) offloaded stake in four of its coal bed methane (CBM) gas blocks to foreign and domestic firms through a recently held auction.

The blocks in which the company wanted to divest stakes are Jharia and Bokaro blocks in Jharkhand and North Karanpura and South Karanpura assets in Raniganj, West Bengal.

The firm decided to rope in joint operators for these blocks, by farming out 35-45 per cent stakes in each of them as it found it difficult to resolve land acquisition issues and the cycle speed of rigs last year.

Following this, the firm sold stakes in every block to two players. While Great Eastern Energy won 25 per cent stake in the Raniganj CBM block, Dart Energy won 10 per cent in Raniganj and 25 per cent in the Bokaro and North Karanpura Blocks, media reports indicate.

Jindal Steel and Deep Industries won 10 and 25 per cent stakes in the North Karanpura and Bokaro blocks, respectively, media reports indicate.

But it is learnt that ONGC will have to seek various approvals for these blocks before finalising investment details in them. So far, ONGC has spent about Rs 510 crore on the four blocks, which the winning bidder might have to pay, in proportion to its stake.

With 74 per cent stake, ONGC is the operator in the Raniganj north block, while Coal India (CIL) holds the rest. At Jharia, ONGC holds 90 per cent stake, while CIL has 10 per cent. At Bokaro and north Karanpura, too, ONGC is the operator, with 80 per cent stake each. In these blocks, IndianOil Corp holds the remaining stakes.