Last Updated : 05 March 2010 at 11:55 IST

Essar Oil draft-CPR hints at high CBM resources

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MUMBAI (Commodity Online): In a recently received draft competent persons report (CPR), Essar Oil Ltd, an oil & gas exploration & production (E&P) arm of Essar group, is said to have an aggregate in-place CBM resource to the tune of 15 tcf.

The company is going high on E&P front by engaging some of the renowned international consultants to provide competent persons report (CPR) certifying the resources in its various oil & gas / CBM blocks.

The company is said to have received the draft of CPRs and the same are expected to be finalized shortly. The company said in a filing with the Bombay Stock Exchange (BSE) today that based on the draft reports of CPR, Essar Oil has aggregate in-place CBM resource of 15 tcf (trillion cubic feet) and recoverable CBM resource of around 7 tcf.

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As per the draft CPR, the Raniganj CBM block has in-place CBM resource of 4.6 tcf and recoverable CBM resource of around 1 tcf. The company has already announced that it will start production from this field in 2nd quarter of 2010. The company has also signed long term contracts with two large industrial customers.

The draft CPR for Rajmahal block states in-place CBM resource of 9.5 tcf and recoverable CBM resource of 4.7 tcf. In the CBM IV round, company has been announced provisional winner of this block, which is located approximately 100 km away from Raniganj CBM block.

Essar is also said to be in process of signing the formal contract in an offshore block in Nigeria, where as per the draft CPR, recoverable oil & gas resources are estimated at 220 MMBOE (million barrels of oil equivalent). The Nigeria block is in the process of being transferred to Essar Oil from Essar Exploration & Production Ltd, Nigeria.

As per the draft CPR reports, the net present value of only the contingent resources and only Crude Oil contingent resources of the Nigeria block is USD 1.8 billion at a 10% discounting rate, the company stated in a filing with the BSE.

Essar Oil (BOM:500134) gained close to 2% to Rs.137.90 on the BSE today, meanwhile the benchmark index, Sensex traded at 17,059.47 points with gains of about 88 points.