Great Eastern Energy Corporation looking at investing $1 billion in Coal Bed Methane projects
Great Eastern Energy Corporation (GEECL), a fully-integrated Coal Bed Methane company listed at the London Stock Exchange has completed a decade of operations in India. Prashant Modi, Managing Director and Chief Executive Officer talks to Bilal Abdi and Sudheer Pal Singh on the company’s 10-year journey and its over $1 billion investment plan in the CBM sector.
Q1. GEECL was the first in the country to get into commercial production of Coal Bed Methane (CBM). 2017 marks a decade of your operations in the CBM segment, how has the journey been?
Our journey has been great; the start off the CBM policy has been good… and the government through its recent cabinet decision has made it better by reinstating investor confidence. Being the first in this business did lead to some challenges, but we have overcome all these challenges with a focused approach and proactive support from both the centre and state governments. The new HELP policy seems to be investor friendly; we are keen to participate in the coming set of auctions under open acreage licensing policy. However, we will take a proper decision after we are through with the fine print of the policy and what’s on offer.
Q2. What are the company’s growth plans for the coming years?
Our first priority right now is our Raniganj (South) block in West Bengal, we intend to drill another 144 wells requiring an investment of around Rs 1,500- 2,000 crore. The work for which will start within the next year and we intend to drill around 40 wells per year. We hope that the ongoing arbitration in our Mannargudi CBM block in Tamil Nadu gets resolved soon, after which we look at the investments plan there. We will also study the new bidding mechanism; Open Acreage Licensing Policy (OALP) and the data available on National Data Repository (NDR) in order to make a decision on what blocks to carve out and bid for. We would in the coming five years invest around $1 billion in the unconventional space (CBM and/or Shale); we are not keen in getting into the conventional space.
Q3. What kind of upside do you see in light of the recent cabinet decision to give marketing and pricing freedom to CBM producers?
It is a game changer for the industry, more investments and players should come in due to this. It will give investor confidence, as what was envisaged in the CBM contract is being upheld. As you know 33 CBM blocks were awarded out of which 18 of them have been or are being relinquished, so there are still 15 blocks out there which are waiting to be developed.