1. Is it an answer to Shale Gas In India?
Coal Bed Methane (CBM)
Is it an answer to Shale Gas In India?
Vilas Tawde
Chief Executive Officer
Essar Oil & Gas Exploration And Production Ltd. (EOGEPL)
Indian Coal Markets Conference
Kolkata
September, 2017

2. Raniganj CBM Production
EOGEPL - Exploration & Production Business
Mehsana(a)
4 Oil Fields
Potentially significant CBM and Shale play
Rajmahal(b)
100% interest in CBM block
Vietnam
50% interest in block 114
Nigeria(c)
Essar 20%,
Shorecan 80%
SP(NE)‐CBM‐2008/IV(b)
100% interest in CBM block
Mumbai Offshore
30% interest
TL‐CBM‐2008/IV(b)
IB‐CBM‐2008/IV(b)
100% interest in these 2 CBM blocks
Raniganj CBM Production
100% interest
Producing Asset
Un-conventional
Conventional
Focus on leveraging Unconventional Expertise in India/Abroad
Production

3. India Natural Gas - Highlights
Current Situation
India is a net Hydrocarbon deficit. Natural Gas mere 9% in Primary Energy consumption.
CBM comprises ~2% of Natural Gas Production
About 50% of Natural gas demand is met by imports.
The Hon. PM reduction of import dependence of Oil & Gas to 10% by 2022 Mission.
Way Forward
Accretion and sustain production from available basins & New Exploration Areas
Develop Un-conventional Resources (CBM, Shales, Tight Resources, etc.).

4. Indian E&P Trends
Eastern India
No Conventional O&G Resources
Huge Coal & Organic Shales present
Note
The Eastern Belt of India is devoid of conventional Oil & Gas
There is a steady increase in demand vs. supply gap of Natural Gas in Eastern India
Therefore, thrust on CBM and/or Shale Gas from Organic rich Gondwana Shales

5. Unconventional Hydrocarbons - Definition
Coal Bed Methane (CBM) is natural gas and it occurs in coals as adsorbed gas.
Shale Gas means natural gas generated in-situ and retained in Shale matrix storage, adsorbed onto organic particles, or within fractures in shales.

6. US CBM and Shale gas production (mmcf), 2007-2011
USA - Shale Gas Development
US Shale Gas
The first factor that drove the revolution in the US was limited gas reserves, demand growth and growing dependence on imports from Canada
This created the impetus for alternative exploration methods, resulting in dramatic growth in shale gas development that began in the late 1990s and continued aggressively in the 2000s (Deloitte, 2015).
Trillion Cubic Feet
Key Factors to Development of Shales (Deloitte)-
Factor
Eastern India fit
Demand-Supply gap
Available
Technology Advance
Key Players & Financing
Regulatory Regime
In the offing
Year
Coalbed Methane Gas
Shale Gas
2007
1,999,748.00
1,990,145.00
2008
2,022,228.00
2,869,960.00
2009
2,010,171.00
3,958,315.00
2010
1,916,672.00
5,817,122.00
2011
1,779,055.00
8,500,983.00
US CBM and Shale gas production (mmcf),
Source: EIA, 2013

7. CBM & Shale Co- Development – Other Examples
Australia
Current CBM Production 120 mmscmd.
Exploration and Development for Shales started in all key basins (Beetaloo, Cooper, etc.) and test production in progress.
Active Policy framework from the Govt. and Industry support are the key drivers
China
CBM production of 30 mmscmd.
Shale Exploration and Production started in all the key basins.
2017 first quarter of the year shale gas output increased to 2.67 billion cu m.
The growth was largely driven by increased
a. government spending on infra.
b. initiatives to replace coal with gas
Source: EIA, 2013

8. CBM in India – So far 26,000 sq. km CBM catchment
Resources projected 92 TCF
66% area awarded so far (4 rounds), 33 blocks awarded
8 blocks in development phase; established reserves c. 10 TCF.
CBM Learnings achieved
Total investment in excess of USD 1.2 bn.
The current CBM production is about +1.5 mmscmd from GEECL,
EOGEPL largest producer of CBM +1.0 mmscmd
Major roadblocks to CBM development were inordinate delays in various regulatory clearances and unfriendly gas pricing regime.
A new Early Gas Monetization for CBM has been announced in April, 2015 with friendly terms for CBM operators.
JH/ESSAR/RM(E)/1128
OR/ESSAR/TL/557
OR/ESSAR/IB/209
CH&MP/ESSAR/SP(NE)/339
Essar’s CBM Blocks
33 Blocks CBM Resource potential 62 TCF
Main operators are Essar, RlL, ONGC, GEECL, DI
* Source: DGH

9. Essar – Pioneers in CBM Pioneers in CBM E&P in India.
Raniganj
(NSAI)-4.6 Tcf (Best Case)
Sohagpur
Resource
(DGH)-0.60 Tcf
Talcher & IB Valley
(DGH)-3.8 Tcf
Rajmahal
(DGH)-3.2 Tcf
Pioneers in CBM E&P in India.
First successful CBM wells way back 1992/93 in North Gujarat.
Foot-print across all key prospective CBM prospective basins
Presently, among the largest CBM acreage & resource holders in the country
Successful CBM Anchor Asset at Raniganj East currently producing ~1.0 mmscmd of gas.

10. Raniganj East CBM Production Asset- Essar
Anchor Asset of Essar.
Currently in Production Phase since 8th July, 2016.
Approved Field Development Plan involves drilling of 500 development wells through the life of the project (2041).
Current status –
Production of ~ 1.0 mmscmd (largest in India)
348 wells drilled
300+ producing wells
250 wells producing gas
5 GGS commissioned and operational
1 MCS
300 Km pipeline (infield & end customers)
3 mmscmd of gas market tied up.
Primary customer ‘Matix Fertilizer & Chemical Limited’s Fertilizer Plant is being commissioned and to be stabilized in 3rd week of September, Peak gas intake rate of 2.5 mmscmd contracted.
Block Location Map
ESSAR RANIGANJ CBM
(500 SQ KM)
Source: Company information

11. Raniganj East - Well head to Market
Drilling Rig
For CBM
PC Pumps running at Well site
Separators installed at Well site
RO Plant
Plantation at Well site
First Gas
Gas Gathering Station
Produced Water
Pipe line Construction

12. Shale resources (Various Estimates)
Schlumberger: 300 to 2100 TCF
ONGC: TCF
(In 5 basins: Cambay Onland, Ganga Valley, Assam & Assam-Arakan, Krishna Godavari Onland & Cauvery Onland)
NGRI (Dr. A M Dayal): 527 TCF
(260 TCF Technically Recoverable)
Shale Gas high prospect basins (6 in order):
Cambay Basin
Gondwana Basin
Assam & Assam-Arakan Basin
KG Basin
Cauvery Basin
Indo-Gangetic Basin
Energy Information Administration (EIA), USA in 2011: 290 TCF
(In 4 basins: Cambay Onland, Damodar, Krishna Godavari Onland & Cauvery Onland)
Energy Information Administration (EIA), USA in 2013: 584 TCF
Central Mine Planning and Design Institute (CMPDI): 45 TCF
(In 6 sub basins: Jharia¸ Bokaro, North Karanpura, South Karanpura, Raniganj & Sohagpur)
USGS under MoU between DoS & MoPNG in Jan’11: 6.1 TCF
(Technical Recoverable Shale Gas of 6.1 TCF for three basins, namely, Cambay, KG & Cauvery)
Source: DGH & DNA

13. Shale Gas – Indian Highlights
ONGC R&D of 4 CBM wells in Damodar Valley. Results reported (48 TCF gas in Raniganj).
Draft National Shale Policy in Aug’ 12.
Identification of prospective basins tasked to NOCs (ONGC & CIL).
NOCs permitted Shale E&P in nominated blocks (Oct, 2013).
ONGC and OIL already identified several blocks and encouraging results reported by ONGC in Cambay Basin (Jambusar/Gandhar).
A Shale Policy is in advanced stage of announcement.
Key Shale Basins – India
(Numbers in order of prospective-ness)

14. Unconventional – Major Challenges
Difficulty in accessing huge land parcels required for developmental drilling.
Most of the prospective areas are in Frontier territories with no ready infrastructure.
Complex multiple-federal-state approval windows.
Gas Evacuation and Market lack in many parts of the country (particularly in Eastern India) was a dampener.
Chances of water scarcity in certain shale territories (viz. North Cambay).
The East-West connectivity by extending the HVJ to Phulpur-Haldia-Dhamra would be a big incentive.

15. CBM & Shale Hydrocarbon - Synergy
CBM & Shale Hydrocarbons are synergetic to each other.
Land/Pad banks from CBM ops., would be available.
CBM & shale Reservoirs are Juxtaposed.
CBM operator’s learning curve can be leveraged.
Drilling and Equipments can be pooled.
Oilfield Services can be diverted.
Surface Facilities can be scaled for usage.
Produced water from CBM field can be used for Shale Hydro-fracturing

16. Is CBM an answer to Shale Gas?
Focus for CBM and Shale Gas should co-exist.
Current production of CBM in Eastern India needs to be escalated by
a. Further CBM production escalation
b. Venture into Shale Gas Resources
CBM has taken two decades to reach at this stage (policy in 1997), but with its learning curve in-place and issues understood, shale development time would be compressed (e.g. China & Australia)
The Govt. of India has adequately actioned-
Launch of the Hydrocarbon Exploration & Licensing Policy (HELP)
Freedom to sale gas at market determined prices
Upcoming Shale Policy in India for more clarity on its E&P.
Source: Petronet LNG

17. Is CBM an answer to Shale Gas?
Considering prognosticated resource CBM (92 Tcf) is quite low than Shale gas ( Tcf)
Sequential development of CBM & Shale gas would not fit in to energy transition timeframe
CBM & Shale Gas are best tackled in synergy to speed up Natural gas deficit particularly in Eastern India.
This also adds to the socio-economic development and greener energy options in Eastern India
The state and central fiscal benefits would also scale up the development

19. Thank you