B Akala, former Chairman & Managing Director (CMD) of Coal Mine Planning and Design institute (CMPDI), said: "First, CBM has to be extracted. Only then coal should be mined. If ONGC is not allowed to extract CBM gas and carry out mining, the PSU will lose crores of rupees every year."
Oil and Natural Gas Corp (ONGC) is losing crores of rupees every year, thanks to the arbitrary allocation of a coal block by the previous United Progressive Alliance (UPA) government in 2005. The petroleum ministry had allocated the Coal Bed Methane (CBM) block in Parbatpur central area of Jharkhand block to ONGC in January 2002. In July 2005, the coal ministry allotted the same block to Electrosteel Castings Ltd (ECL). While the petroleum ministry awarded the block to ONGC for gas extraction, ECL was allotted the same block for coal mining.
In September 2014, when the Supreme Court (SC) cancelled coal blocks, the Parbatpur block also got cancelled. Subsequently, the BJP government decided to re-auction this block in February 2015. The allocation of this block for coal mining again will again mean huge losses to ONGC. The allocation was done when former Prime Minister Manmohan Singh was the coal minister and PC Parakh was the coal secretary. "I don't remember anything about this allocation now," Parakh told dna.
How much has ONGC invested in the block?
Documents available with dna show ONGC has invested close to Rs 400 crore so far. "With each passing day, the PSU is losing money as gas is escaping. This new allocation will be disastrous as ONGC will again suffer and its decade-long efforts will go in vain," said a petroleum ministry source.
Do coal blocks also contain gas?
Coal blocks contact CBM gas also. Methane gas trapped in coal seams is valuable energy resource, which must be harnessed prior to coal mining. Otherwise, this gas, which is same as any other, like natural gas extracted from Krishna Godavari basin or from the Gujarat coast, will escape into the atmosphere and get wasted.
What did ONGC do after SC verdict?
Soon after the SC cancelled coal blocks, ONGC wrote to the petroleum secretary and the coal ministry in November 2014, requesting for exclusion from re-allocation of de-allocated coal blocks, since it overlaps with existing CBM blocks of ONGC. "... The aforesaid request is made to protect the extraction of CBM by ONGC from the aforesaid CBM blocks without any hurdle from the allottees of the coal blocks, so that national resources of CBM is not wasted during coal mining and can be explored fully to meet the energy need of the country...", the letter said.
What do experts say?
B Akala, former Chairman & Managing Director (CMD) of Coal Mine Planning and Design institute (CMPDI), said: "First, CBM has to be extracted. Only then coal should be mined. If ONGC is not allowed to extract CBM gas and carry out mining, the PSU will lose crores of rupees every year."
What's happening to the block now?
On January 12, 2015, the coal ministry gave a notice to prospective bidders of 23 blocks, including Parbatpur, for a site visit before auction, making it clear that ONGC's requests fell on deaf ears. In fact, during the previous regime, the coal ministry didn't use to inform ONGC or the petroleum ministry before allocating blocks.
What's ECL, coal ministry saying?
According to ECL spokesperson Arun Garodia, "We do not want to comment on the matter."A detailed questionnaire sent to ONGC and coal secretary Anil Swarup went unanswered.
Didn't the petroleum ministry intervene?
For more than eight years, ONGC and the ministry have written hundreds of letters to ECL and the coal ministry, but to no avail. AK Biswas, general manager, ONGC, wrote to NC Bahl, director, ECL, in October 28, 2005, to stop all activities. ONGC even explored the possibility of simultaneous gas extraction and coal mining, but it was found technically unfeasible.
And then?
When ECL didn't pay heed to ONGC's requests for more than two years, then petroleum secretary MS Srinivasan wrote to coal secretary HC Gupta in December 2007, saying, "... ONGC has made substantial investments in the area; it is felt that the CBM activities as undertaken by the ONGC consortium should precede coal mining." Though ONGC and the petroleum ministry repeatedly requested the coal ministry and ECL, ECL kept on mining and the ministry didn't intervene.
Is there a CBI case against ECL?
Last month, the Central Bureau of Investigation registered a case against ECL for alleged criminal conspiracy and cheating in acquiring a coal block mine in Jharkhand.
Did ONGC mention about national loss?
In June 2013, ONGC wrote to ECL and the petroleum and coal ministries stating, "The entire chronology of events makes it amply clear that ECL has no intention of resolving the issue and it has attended meetings just to buy time and continued unauthorised mining in the block. In the process, ONGC has not been able to undertake its field development programme and produce CBM from the block. Needless to say, loss to ONGC is loss to the public exchequer."
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