Oil India Signs Contract for 272 Sq Km Coal Bed Methane Block in Singrauli, Expanding India’s Domestic Natural Gas Exploration

Oil India Limited (OIL), a Maharatna public sector undertaking under the Ministry of Petroleum and Natural Gas, has signed a Revenue Sharing Contract (RSC) for a 272.14-square-kilometre Coal Bed Methane (CBM) block in the Singrauli Coalfield region. The agreement marks the company’s return to coal bed methane exploration and strengthens its efforts to develop India’s unconventional natural gas resources.

The contract for Special CBM Block SR-ONHP-(CBM)-2026/1 was signed on 15 October 2026. Oil India formally announced the development through a regulatory disclosure dated 18 October 2026.

The project forms part of India’s broader efforts to expand domestic hydrocarbon exploration, diversify natural gas supplies and strengthen long-term energy security.

Oil India Secures 272.14 Sq Km Exploration Block in Singrauli

The newly contracted coal bed methane block covers 272.14 square kilometres in the Singrauli Coalfield region, one of India’s established coal-bearing geological areas.

According to Oil India’s official announcement, preliminary geological assessments indicate promising prospects for methane exploration. The targeted coal seams are expected at depths ranging from 600 to 800 metres, with an average seam thickness of approximately 40 metres.

These geological characteristics provide a basis for investigating the presence and commercial potential of methane trapped within coal formations.

The Revenue Sharing Contract establishes the framework under which Oil India will undertake exploration and subsequent development activities in accordance with the applicable regulatory provisions.

The initiative expands the company’s exploration portfolio beyond conventional oil and natural gas resources into unconventional gas-bearing geological formations.

Contract Signed in Presence of Union Petroleum Minister

The contract-signing ceremony took place on 15 October 2026 in the presence of Union Minister for Petroleum and Natural Gas Hardeep Singh Puri.

Senior officials attending the ceremony included Dr. Neeraj Mittal, Secretary, Ministry of Petroleum and Natural Gas, and V. Ponnuraj, Director General of the Directorate General of Hydrocarbons (DGH).

Oil India was represented by Trailukya Borgohain, Director (Operations), along with other company officials.

The participation of senior government and regulatory representatives reflects the importance attached to the development of unconventional natural gas resources.

Oil India described the agreement as a significant milestone in its strategic energy diversification programme and a renewed commitment to coal bed methane exploration.

What Is Coal Bed Methane and How Is It Produced?

Coal Bed Methane is a form of natural gas found within coal-bearing geological formations. It consists predominantly of methane, the principal component of conventional natural gas.

Unlike conventional natural gas reservoirs, where gas generally accumulates in the pore spaces of permeable rock formations, coal bed methane is largely stored within the coal itself through a process known as adsorption.

Methane molecules adhere to the internal surfaces of coal, while pressure within the geological formation helps retain the gas.

Commercial CBM production generally involves drilling wells into suitable coal seams and reducing reservoir pressure, often by extracting formation water. This allows methane to separate from the coal and flow towards the production wells.

The recovered gas can subsequently undergo processing to meet applicable quality standards before being transported for industrial, commercial or other uses.

The suitability of a coal seam for commercial methane production depends on several geological and technical factors, including gas content, permeability, seam continuity and reservoir pressure.

Why Singrauli Is Important for Coal Bed Methane Exploration

The Singrauli Coalfield is an important part of India’s coal-bearing geological landscape and has historically supported large-scale energy and industrial activities.

Coal formations can contain methane generated during the geological processes responsible for coal formation.

The presence of substantial coal deposits therefore creates opportunities to investigate whether commercially recoverable methane resources are available.

Oil India’s newly contracted block has coal seams expected at depths of 600–800 metres, making it a prospective area for specialised CBM exploration.

The project will enable the company to examine the geological characteristics of these formations and assess their potential for gas extraction.

Successful development of commercially viable CBM resources could add another source of natural gas to India’s domestic energy portfolio.

Coal Bed Methane Can Strengthen India’s Natural Gas Supply

India uses natural gas across several important sectors, including fertiliser manufacturing, petrochemicals, industrial heating, city gas distribution and electricity generation.

Domestic natural gas production remains an important component of the country’s energy security strategy, alongside imported liquefied natural gas.

Coal bed methane provides an opportunity to develop gas resources associated with existing coal-bearing regions.

Unlike conventional gas exploration, CBM development focuses on methane retained within coal formations, allowing companies to investigate a different category of hydrocarbon resources.

Expanding exploration in prospective coalfields can help improve knowledge of India’s unconventional gas potential and identify additional opportunities for domestic production.

The Singrauli contract contributes to this objective by bringing a substantial coal-bearing exploration area into Oil India’s active resource development programme.

Oil India Expands Beyond Conventional Hydrocarbon Exploration

Oil India is one of India’s major public sector exploration and production companies, with operations covering crude oil, natural gas and associated hydrocarbon activities.

The company has extensive experience in geological exploration, drilling, reservoir assessment and hydrocarbon production.

Its entry into the Singrauli special CBM block represents a renewed focus on unconventional resources as part of a diversified exploration strategy.

Coal bed methane exploration requires specialised expertise in coal geology, reservoir behaviour, drilling and production techniques.

Oil India’s experience in subsurface exploration and hydrocarbon development provides an institutional foundation for evaluating the Singrauli block.

The project also broadens the company’s participation in India’s efforts to assess and develop energy resources beyond conventional oil and gas reservoirs.

Revenue Sharing Contracts Support Hydrocarbon Exploration

Revenue Sharing Contracts form part of India’s regulatory arrangements for exploration and production of hydrocarbon resources.

Under a revenue-sharing framework, the contractor undertakes exploration and development activities while the government receives a contractual share of revenue from hydrocarbon production.

The arrangement establishes the commercial and regulatory basis for developing resources within an awarded block.

For unconventional resources such as coal bed methane, this framework provides a mechanism for bringing prospective geological areas under structured exploration programmes.

The Singrauli agreement enables Oil India to advance technical evaluation and resource assessment within the 272.14-square-kilometre block.

The development reflects continued efforts to encourage exploration across India’s conventional and unconventional hydrocarbon sectors.

Supporting India’s Energy Security and Domestic Resource Development

India’s increasing industrial activity, urbanisation and energy requirements have strengthened the importance of developing domestic fuel resources.

Natural gas plays a role in several industrial processes and can offer lower direct carbon dioxide emissions than coal when burned for an equivalent amount of useful energy.

However, its overall environmental performance also depends on controlling methane leakage during extraction, processing and transportation.

Developing coal bed methane resources therefore requires effective reservoir management, responsible water handling and appropriate environmental safeguards.

The Singrauli project offers an opportunity to investigate additional domestic gas resources while applying modern exploration technologies and operational practices.

The agreement also contributes to India’s wider efforts to diversify its energy supply base and strengthen the capabilities of public sector energy companies.

Oil India’s Singrauli Project Marks a New Phase in Unconventional Gas Exploration

The signing of the Revenue Sharing Contract for Special CBM Block SR-ONHP-(CBM)-2026/1 marks an important development in Oil India’s exploration portfolio.

Covering 272.14 square kilometres, the block provides access to prospective coal-bearing formations with expected seam depths of 600–800 metres.

The project brings together Oil India’s exploration expertise and India’s policy framework for developing unconventional hydrocarbon resources.

As technical evaluation progresses, the Singrauli block will contribute to a better understanding of the country’s coal bed methane potential and the opportunities available for domestic natural gas development.

Oil India’s renewed investment in coal bed methane exploration strengthens India’s efforts to identify indigenous energy resources, diversify its hydrocarbon portfolio and build greater long-term energy security.

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References

1. Oil India Limited — Official Press Release and Stock Exchange Disclosure, 18 October 2026. OIL Achieves a Landmark Milestone with Signing of Special CBM Block RSC. The company confirmed the agreement date, block identification, geographical area, coal seam characteristics and participating officials.
   Oil India Official Regulatory Disclosure
2. Oil India Limited — Official Website. Corporate information, exploration activities and natural gas development programmes.
   https://www.oil-india.com/
3. Directorate General of Hydrocarbons, Ministry of Petroleum and Natural Gas. Information on coal bed methane exploration, hydrocarbon blocks and exploration policy.
   https://www.dghindia.gov.in/
4. Ministry of Petroleum and Natural Gas, Government of India. Policies and initiatives concerning domestic hydrocarbon exploration and natural gas development.
   https://mopng.gov.in/

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