Essar Commits $100 Million to Boost Gas Output from Key Indian CBM Field
In a significant move to bolster India's domestic energy supplies, Essar Oil and Gas Exploration & Production Ltd (EOGEPL) has announced a $100 million investment to expand operations at its Raniganj East coal bed methane (CBM) block in West Bengal. The capital infusion, reported by the Economic Times, targets enhanced gas extraction from what is already the nation's largest CBM-producing asset.
The upstream arm of the diversified Essar Group plans to deploy the funds for a new drilling campaign, marking the next development phase for the block. This initiative will include pilot projects for advanced horizontal CBM wells, a technique expected to improve recovery rates from the reservoir, which holds an estimated four trillion cubic feet of in-place CBM resources.
"Our sustained investment in Raniganj East underscores its strategic importance," said EOGEPL CEO Pankaj Kalra. "To date, we have invested over Rs 60 billion here, building a network of 454 wells and more than 350 km of pipelines. This new $100 million commitment will build on recent successes, including about 100 new wells drilled in the past few years that are now contributing to output."
The block's existing infrastructure can process up to three million standard cubic metres of gas per day (mscmd). The fresh investment is designed to push production capacity higher, aligning with a company roadmap to reach approximately 5 mscmd by 2028 through a mix of incremental CBM drilling, improved recovery methods, and potential shale gas development.
Beyond CBM, EOGEPL is actively evaluating the shale gas potential within the Raniganj area. Collaborative technical studies with IIT Bombay and the University of Utah have identified promising hydrocarbon signatures and suitable geo-mechanical conditions for shale extraction, potentially unlocking another domestic energy source.
This development aligns with the Indian government's broader push to increase the share of domestic gas in the energy mix, aiming to curb costly imports and fuel the expansion of city gas distribution networks and industrial consumption. Regions like Raniganj, with established infrastructure and proximity to major demand centres in Eastern India, are natural focal points for such investments.
The Essar Group's energy investments are not confined to India. Earlier this year, Essar Oil UK partnered with Elessent Clean Technologies to develop a major industrial carbon capture facility at its Stanlow refinery, highlighting a parallel strategic focus on energy transition technologies.
Industry Voices
Arjun Mehta, Energy Analyst at Horizon Consultants: "This is a logical, capacity-driven investment in a core asset. Raniganj East is a proven block, and scaling up here is less risky than greenfield exploration. It directly supports national energy security goals."
Dr. Priya Sharma, Geologist & Former Professor at IIT Dhanbad: "The pivot to pilot horizontal wells is a positive technical step. However, the real test will be the economic viability of shale gas in this basin. The geology is complex, and the environmental footprint of combined CBM and shale development needs careful monitoring."
Rohan Kapoor, Climate Policy Advocate: "Another $100 million to dig up more fossil gas? This is a shortsighted bet against our climate commitments. We should be pouring this capital into renewables and grid modernization, not locking ourselves into decades of further methane extraction. It's a step backwards for a country vulnerable to climate change."
Sanjay Patel, Small Business Owner in Asansol: "More local gas production is welcome news for our manufacturing units. Reliable, affordable fuel can reduce operational costs and help us compete. Hopefully, this investment also brings stable jobs to the region."