Five exploration blocks holding an estimated 6.6 tcf of gas-in-place resources have been awarded to Essar Oil & Gas, India's largest coal bed methane producer, across roughly 1,281 km² in three states. The awards came through the Indian government's Special CBM (SCBM) Bid Rounds 2025 and 2026, with contracts signed at a ceremony presided over by Minister of Petroleum and Natural Gas Hardeep Singh Puri. The upstream arm of Essar Group now holds the raw acreage to pursue a stated goal of supplying 5% of India's total natural gas output.

What does the new acreage change on the ground?

The practical core of the award sits in West Bengal. Two blocks in the Raniganj coalfield cover about 330 km² and sit alongside Essar's existing Raniganj East operations, which span roughly 500 km². Combined, that gives the company a contiguous footprint of approximately 830 km² — a position it expects to deliver operational efficiencies and, ultimately, the country's largest CBM-producing field.

The remaining awards break new ground in two directions. A third block at Singrauli in Madhya Pradesh deepens the company's position in a basin already associated with CBM work. The last two blocks sit in the Godavari Valley of Telangana, marking Essar Oil & Gas' first entry into that basin — an appraisal-stage frontier rather than a sanctioned development, and worth watching on that basis.

For practitioners, the takeaway is simple: Raniganj is now a consolidation story with existing infrastructure behind it, while Singrauli and Godavari are exploration stories yet to prove commerciality.

How much money is committed, and against what production base?

Essar Oil & Gas has committed more than $632.4m (Rs60bn) to exploration and production work at Raniganj, where output currently stands at around 950,000 standard cubic metres per day. That volume represents close to half of all CBM production across India.

CEO Pankaj Kalra framed the award as a scaling opportunity built on that base. "The award of these five CBM blocks marks a significant milestone in Essar Oil & Gas' growth journey and reinforces our commitment to unlocking India's vast unconventional hydrocarbon potential," Kalra said.

"Building on our proven track record at Raniganj, we see substantial opportunities to leverage our technical expertise, operational capabilities and established infrastructure to accelerate the development of these resources," he added. "Our focus will be on translating this expanded acreage into sustainable production growth, creating long-term value and contributing meaningfully to India's energy security by strengthening domestic natural gas supplies and reducing dependence on imports."

Why does the government keep pushing CBM rounds?

The policy context is straightforward: imported gas currently accounts for roughly half of India's consumption. The contract signings were facilitated by the Ministry of Petroleum and Natural Gas and the Directorate General of Hydrocarbons as part of wider government efforts to develop unconventional hydrocarbon reserves. For operators and service companies, the SCBM rounds signal a continuing pipeline of CBM acreage on offer, with the 2026 round already feeding awards.

For a company already producing near half of national CBM output, contiguous acreage with shared infrastructure is the cheapest growth it can buy. The watch item is the pace at which the 6.6 tcf in-place number converts into proved reserves and the first Godavari Valley wells.