KOLKATA (miningweekly.com) - The Indian government is mulling a move to push Coal India Limited (CIL) and oil exploration and production (E&P) major ONGC to collaborate on stepping up production of coalbed methane (CBM) in the country.

According to a senior government official, collaboration between the two government-owned and managed resource majors was seen as the best option to slash bureaucratic red tape, avoid conflicts over turf and create synergies in terms of technological capabilities to achieve higher CBM production.

He said only a joint effort by CIL and ONGC would enable government to achieve its targeted production of ten-million cubic metres a day of CMB by 2017, compared with a mere one-million cubic metres a day at present.

In 2013, the government empowered CIL, which controlled 80% of CBM-bearing coal blocks in the country, to enter into commercial exploitation of the gas; however, the miner had not been able to make any headway to date.

One of the major roadblocks had been the Oil and Natural Gas Ministry’s insistence on keeping CBM as a business vertical for domestic oil and gas E&P companies, even though coal-bearing blocks were under ownership control of coal mining companies under the Coal Ministry, the official said.

Simultaneously, coal companies, such as CIL, had entered into joint ventures with private miners or mine developer operators to develop coal blocks but, owing to a policy aberration, these transactions were not permitted to exploit CBM on the same block.

The government recently allocated 30 coal blocks for CBM exploration, but only one block in the eastern Indian province of West Bengal had gone into production. As a result, the government's target of seven-million cubic metres a day by 2014, had been missed.

The regulatory environment would also need to be clarified as coal blocks were under the administrative control of the Coal Ministry, while the hydrocarbon sector was governed by an independent regulator, the Directorate General for Hydrocarbons, the official said.

The ministries for Coal and Oil and Natural Gas were also expected to hold consultations on expanding the exploratory capacities of CIL and ONGC, as well as explore possibilities of roping in overseas specialised exploration companies, given that less than half of India’s estimated 26 000 km² of CBM sediments was currently under exploration, he added.