New Delhi: Reliance Industries, Essar Oil, Oil and Natural Gas Corporation (ONGC) and Indian Oil Corporation (IOC) on July 26 signed contracts with government for exploration of gas in five Coal Bed Methane (CBM) blocks awarded to them.

The contracts were signed in presence of Petroleum Minister Ram Naik, Minister of State for Coal Ravi Shankar Prasad, Minister of State for Petroleum S K Gangwar, Coal Secretary N K Sinha and Petroleum Secretary B K Chaturvedi.

Out of the five blocks, contracts for which was signed on July 26, two blocks each are located in Jharkhand and Madhya Pradesh and one in West Bengal.

Speaking on the occasion, Naik said CBM is found in coal bearing areas and production of CBM would provide a new source of natural gas to the country while making coal mining safer and reducing environmental hazards.

CBM resource base in the 5 blocks is estimated at about 235 billion cubic meters. CBM being a low pressure gas could be utilised locally for power generation, industry as well as domestic use and would help to boost the local economy, he said.

"The initial investment in these blocks is estimated to be about Rs 200 crore and further investments would then depend upon the results of assessment of commerciality of CBM available," Naik said.

ONGC-IOC combine signed contracts for Bokaro and North Karanpura blocks in Jharkhand while RIL inked contracts for Sohagpur East and West CBM block in Madhya Pradesh. Essar Oil signed contract for the prime East Raniganj block in West Bengal.

PTI