Essar Oil has signed production sharing contracts for four CBM blocks it had won under the recently concluded fourth round of auction. The company expects to commence gas production from its Raniganj coal bed methane (CBM) block in Burdwan district of West Bengal. The Raniganj CBM block will produce 90,000-100,000 cubic metres per day of gas initially and will touch a peak output of 3.5 million standard cubic metres per day by mid-2013 and will last 20 years. Essar Oil will invest USD 300 million for CBM gas production.

The Raniganj block, located in the industrial region of West Bengal, is the oldest coal-mining zone and has in-place resources of 4.6 trillion cubic feet (Tcf) and recoverable resources of around 1 Tcf. In the Rajmahal block, the in-place resources have been estimated at 9.5 Tcf, with recoverable resources of 4.7 Tcf.