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Deep Industries Limited

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Technical and Environmental Challenges for CBM Resource Development in India

3rd India Unconventional Gas Forum Conference (IUGF) 2013

18th January 2013


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CBMAn Overview

Introduction► Trapped in the middle of coal, CBM is naturally occurring

methane gas with traces of other hydrocarbons and non-hydrocarbons

► The global estimate for potential CBM production is expected to be more than 7000 Tcf

► The countries that are currently significant producers of CBM are Australia, Canada, US, India, China and a few western European countries

► Close to 10% of the natural gas produced in US is contributed by CBM

CBM Resources across the Globe (Tcf)

Pumping methane gas from a coalbed

229-2697 469-2598

579-1200449-900


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India CBM- Update 33 Blocks CBM Resource potential 62 TCF

Main operators are DIL, Essar, RlL, ONGC, GEECL,

RNRL, BP & Dart Energy

CBM Blocks awarded till date

StateNo. of Blocks

Area (Sq.Km)

West Bengal 4 1308

Jharkhand 7 2454

Madhya Pradesh 7 3701

Rajasthan 4 3972

Chattisgarh 3 1917

Andhra Pradesh 2 1136

Maharashtra 1 503

Gujarat 1 790

Orissa 2 766

Tamil Nadu 1 766

Assam 1 113

Total 33 17,246 * Source: DGH


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DEEP INDUSTRIES LIMITED: OVERVIEW

• Diversified oil & gas company serving the industry in India since 1991.

• Business interests: Gas Compression Drilling and Work over Rigs Oil & Gas Exploration & Production CBM Exploration & Production

• Largest natural gas compression service provider in India in the private sector, with over 90% market share.

• E&P portfolio includes domestic & overseas blocks.


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DIL- Exploration & Production Assets

DIL India Operations DIL Indonesia operations

Marginal Gas fieldsTotal Acreage: 94.26 sq.

kmTotal Resource: 1.42

BCM

GV(N)-CBM-2005/IIIAcreage: 386 sq. kmResource: 29.6 BCM

VN-ONN-2010/1Acreage: 3776 sq. km

SR-ONN-2005/IAcreage: 789 sq. km

VN-ONN-2010/2Acreage: 4909 sq. km

SR-CBM-2005/IIIAcreage: 338 sq. kmResource: 31.32 BCM

CB-ONN-2010/3Acreage: 534 sq.

km

Total Acreage holding:

Reservoir Type India Indonesia Total

CBM 724 sq. km 996 sq. km 1720 sq. km

Oil & Gas 10102 sq. km - 10102 sq. km


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Singrauli CBM Block At a Glance

Parameter Singrauli CBM

Block Stage Under Appraisal Phase

Acreage 330 sq. km

Reserves / Resources 1,106 bcf (GIIP)

No. of Seams 8

Coal Seam Depth 2015 ft – 2800 ft

Coal Seam Thickness (net)

88.6 ft

Gas to Coal Content 130 – 180 (scf/ton)


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Singrauli CBM BlockProspective Area

SC-03

SC-08

SC-07

SC-01

SC-04

SC-02

SC-05

SC-06Core Program: 9 coreholes• Coal thickness (Core & Log)• Gas Content, Adsorption

Isotherm• Injection/ Falloff

Permeability Test

Production Wells: 5-Spot pilot• Production Test• Completion Effectiveness• Relative Permeability• Reserve CertificationReservoir Simulation• Spacing & Pattern• Production Forecast• Field Production Potential• Field Development Program

* to be completed

Five Spot


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• Drilling large number of wells at low cost is a big

challenge in CBM. The innovative combination drilling of surface

section using small rigs and Coal section to the target depth drilled using Air Drilling rigs resulted in reduction of drilling time and cost up to 30-35%

• Benefit of using Air as drilling fluid

Minimum formation damage Faster penetration rates, longer bit life and

fewer trips

350 M (Approx)

12 1/4” hole X 9 5/8” casing

8 ½” hole X 7” casing

Water Well Mud Drilling

Air Drilling

850 M (Approx)

Air Drilled Well

Open Cleats Around

Wellbore

Damage Zone Around

Wellbore

Mud Drilled Well

CBM Well Drilling


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Dewatering the CBM Wells• CBM Well Production Challenges

• Dewatering time - Optimum speed of pumps need to be maintained to achieve desired dewatering

• Sand flow back and workovers- Sand flow back and frequent pump repairs during the initial phase requires workover rig all times

• Produced Water Quality• CBM Projects in India generally have good

quality of water produced from the CBM wells which requires no or very little water treatment before disposal. But disposal of large quantity of water is a challenge.

Relative Permeability1

0.8

0.6

0.4

0.2

0

0 0.2 0.4 0.6 0.8

krg

krw

1

Saturation

Well STW # 3


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Typical Coalbed Methane Well Production Profile

1,000 Peaks Flattens Somewhat

Decline Depends on

Well Spacing100

Gas

10

Water10 5 10 15 20

TIME, years

Pro

du

ctio

n R

ate

( W

ater

- B

BL

/ D

ay),

Gas

(M

SC

FD

)


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Multiple Seam Completion


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Surface Facility and Compression of Gas


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1 vertical well and 4 directional wells at 90 Deg phasing with horizontal reach of about 500 -600 m drilled from a pad.

Many benefits of this approach:• Land Requirement reduction up to 60% • Land cost savings and Civil work savings• Savings on ILMs of drilling rigs, logging

trucks, cementing units, HF Units , completion & workover rigs

• Savings on in-filed pipelines, instrumentation and surface facilities

• Logistics, security, etc.

Directional Wells from a single well site

Large Land Sites for drilling CBM Wells

500 m


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Logistical, Environmental & Social Challenges• Logistical: Very less logistic support available as generally all CBM assets

occur in the remote areas– CBM requires drilling of very large number of wells and setting up

required surface facilities– Extensive logistics support need to be created

• Environmental: As CBM reservoirs are low pressure operations, environment impact is very less– Need amendment in the existing rule and regulations

• Social: Effect on local community and their resistance– Need the follow good and effective CSR plan


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• Almost all the CBM blocks in India are located in frontier areas• No CBM gas transportation infrastructure developed

CBM Evacuation Challenges


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• Coalbed methane is a technology play that requires reservoir understanding

and appropriate technology for all phases of prospect evaluation and field

development.

• Drilling, completing and producing of large no of wells at low cost using

innovative techniques always remains a challenge.

• CBM Reservoirs are generally water saturated & require dewatering and gas

production takes time to commence.

Conclusion


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Thanks

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