Essar Oil chairman Shashi Ruia said the company had evaluated the current coal bed methane(CBM) offering by the government and has bid for three prospective blocks in the coal-rich Damodar valley. "We expect that during the current year, approval of the government would be received for conducting CBM exploration in block CB-ON/3 in the Mehsana district of Gujarat, where the company drilled three wells earlier, to establish the CBM potential."
In his address during the 12th annual general meeting held on Friday, Ruia said the company has completed the formalities pertaining to the production sharing contract (PSC) for the Ratna and R-series fields near Ratnagiri and is awaiting the final signing.
Ruia mentioned that the energy division of the company continues to perform well in view of high oil prices internationally. This has led to a sharp increase in the utilisation of land rigs and hardening of charter rates. It is expected that the occupancy of rigs will stay high in the near term. The company has contracts worth about $80 million in hand. Two rigs in Oman which were coming off contract during April 2000 to March 2001 have received extensions which ensures continued deployment through the current financial year.
He further said that with current market trends, three rigs coming off contracts are expected to get fresh employment at better rates. Two rigs have become operational in the Saudi market, one of which in the last financial year and one during this year. This has added to the growth in energy business. These developments are expected to generate substantial demand for drilling contractors in the coming years and the company is expected to obtain a good deal of business.
Ruia said the 10.5 MMTPA refinery project has achieved full financial closure and the company is at an advanced stage of complying with certain pre-disbursement conditions stipulated by the financial institutions and banks, after which the work at the refinery site will resume. The implementation of the refinery is 63 per cent complete and the amount invested on the same is Rs 6,300 crore as on June 30. After restarting the project work, the refinery is expected to be commissioned within 18 to 24 months.
