Facing a $32 billion knockback due to the gigantic oil spill in the Gulf of Mexico, British Petroleum is weighing venturing out of long-gestation projects.
The company’s Indian arm has decided to exit its only coal bed methane block in India. BP has informed the directorate general of Hydrocarbons that it is no longer interested in exploring gas in the block in West Bengal.
“BP has put up a request that they would like to walk out of Birbhum CBM block. In their perception, the prospectivity of the project was not as good as expected,” said SK Srivastava, director general of hydrocarbons.
The coal bed methane block at Birbhum was awarded to the local arm of BP in 2006. BP owns 100% stake in the block.
In 2009, BP was looking to divest a part of its stake in the CBM project. However, the deal could not be finalised due to valuation issues.
“We believe technical evaluation of the block to be complete,” BP said in an emailed statement to Reuters, adding it had written to the government and is awaiting a response.
“Drilling results indicate the presence of much lower gas content than anticipated with the absence of commercial gas in all depositional lows in the block as per our assessment,” BP said.
The emerging sector of coal bed methane gas has seen interest from prominent players such as Reliance Industries and the Essar Group.
Essar is soon likely to become a second CBM gas producer to go commercial this quarter, nearly a year after Great Eastern energy Corporation, a YK Modi company became the first commercial CBM gas producer in India.
RIL, too, has completed evaluation of its CBM blocks but is yet to start production of gas.
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