Essar Oil plans to invest about Rs 4,000 crore in the next three years for developing three coal bed methane (CBM) blocks in Jharkhand, Gujarat and West Bengal. Essar’s exploration and production (E&P) engaged Netherland Sewell & Associates Inc, RPS Energy and Advanced Resources Inc, to provide a Competent Persons Report (CPR) based on which, Essar Oil has aggregate in-place CBM resource of 15 trillion cubic feet (tcf) and recoverable CBM resource of around seven tcf.

The Raniganj block has in-place CBM resource of 4.6 tcf and recoverable CBM resource of around one tcf. The company will start production in the second quarter of 2010. The draft CPR for Rajmahal block states in-place CBM resource of 9.5 tcf and recoverable CBM resource of 4.7 tcf.

Essar is also likely to sign a contract in an offshore block in Nigeria where, recoverable oil & gas resources are estimated at 200 million barrels of oil equivalent (MMboe). The CPRs also indicate oil and gas resources in the Ratna & R-series field in Mumbai High, in which Essar has 50 per cent stake and is awaiting signing of production sharing contract (PSC) with Indian government, and CBM resources in Mehsana.