GEECL intends to drill core wells at the block in the first half of next year. Credit: Zbynek Burival on Unsplash.

India-based coal bed methane (CBM) production firm Great Eastern Energy (GEECL) has announced plans to invest $2bn in its Raniganj (South) block in the state of West Bengal over the next ten years for exploitation of shale reserves.

Press Trust of India (PTI) cited GEECL chief executive Prashant Modi as saying that the CBM block is estimated to contain as much as 6.63 trillion cubic feet (tcf) of shale resources, of which about 1.7tcf can be recovered.

In addition, the block holds 2.62tcf of coal seam gas or CBM resources, which are claimed to have an undiscounted value of $13.78bn and a discounted value of $4.31bn.

GEECL is planning to commence initial shale gas exploration work of drilling core wells at the block in the first half of next year, before undertaking drilling of pilot production wells.

Modi was quoted by the news agency as saying: “Depending on the results obtained and analysed from the core wells, we thereafter intend to drill an optimum number of pilot production wells.

“Based on further results obtained and analysed from the pilot production wells, the total investment envisaged for the full development of shale resources in our block could be in the region of $2bn.”

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“The total investment envisaged for the full development of shale resources in our block could be in the region of $2bn.”

The investment plan comes after the company upgraded resources at the Raniganj (South) block earlier this month.

At that time, GEECL said it found prospective shale resources with potential future net revenues of $2.78bn.

According to Modi, the company decided to embark on the exploration of shale reserves in its blocks after the Indian government recently allowed exploration and exploitation of all types of hydrocarbons including shale resources under the existing CBM contracts.

He added that GEECL has reached an initial understanding with state-owned oil and gas firm GAIL (India) for signing either a gas offtake deal or a transmission agreement through GAIL’s Jagdishpur-Haldia & Bokaro-Dhamra pipeline.

This pipeline is expected to become operational by 2020 and will potentially enable GEECL to have greater market access.

India aims to increase the share of gas in its energy mix from the current 6.5% to 15% by 2022.