Great Eastern Energy Corporation Ltd, a pioneer in the field of coal bed methane in India, is a fully integrated and leading CBM company focused on the monetisation of natural gas from coal seams. Prashant Modi, in an email interaction with Sandeep Menezes, says that the absence of free market pricing has resulted in a situation where Indian companies find it more profitable to invest overseas.
The pricing of imported gas remains much higher than domestically produced gas. Will this scenario encourage domestic companies to invest overseas in E&P and eventually sell the same in India?
Yes. The absence of free market pricing has resulted in a situation in which Indian companies find it more profitable to invest overseas. The gas is then imported to India as LNG by paying through India’s foreign exchange reserves. Thus, we are investing overseas, creating job opportunities there, and developing their economies rather than doing all that in India.
The contracts provide for free market pricing, which was the basis on which companies had bid and won these blocks. All contract terms need to be adhered to.
The pricing of products has been a contentious issue in India and free market pricing has eluded the industry.
The contracts provide for free market arms’ length pricing and this should be honoured. Currently, for crude oil produced domestically import parity pricing is allowed. We fail to understand why this is denied to gas, which is not only more efficient but also more environment friendly.
India has a miserable track record in coal bed methane. Do you think we have failed to exploit the opportunities?
We are successfully and commercially producing and selling CBM since 2007. We cannot comment on others.
What is GEECL’s future business strategy?
Raniganj (South) Block: We plan to drill another 150 wells in our Raniganj (South) Block.
Mannargudi Block: We are awaiting the Consent to Establish from the state government.
Raniganj (North) Block: We have recently been awarded a 25 per cent participating interest in ONGC’s Raniganj (North) Block. After execution of the Joint Operating Agreement and necessary approvals from the government, we will be able to start work in this block.