Oil India Ltd (OIL) has signed a revenue sharing contract (RSC) for a 272.14 sq. km special coal bed methane (CBM) block in the Singrauli Coalfield region, marking its return to CBM exploration as it seeks to expand its unconventional hydrocarbon portfolio.
The contract for the block was signed on October 15, 2026, in the presence of Union Minister for Petroleum and Natural Gas Hardeep Singh Puri, Petroleum and Natural Gas Secretary Neeraj Mittal and Directorate General of Hydrocarbons Director General V. Ponnuraj.
Oil India was represented at the signing ceremony by Director (Operations) Trailukya Borgohain and his team.
Geological potential
The block has promising geological prospects, with coal seams expected at depths of 600–800 metres and an average seam thickness of around 40 metres.
Coal bed methane is natural gas trapped within coal seams. It can be extracted and used as a fuel for power generation, industrial applications and other energy requirements, offering an additional source of domestic natural gas.
The geological characteristics of the Singrauli block provide an exploration opportunity for OIL, although the commercial potential will depend on further assessment, extraction performance and project economics.
Focus on energy diversification
The contract marks a step in OIL’s efforts to diversify its energy portfolio and tap India’s unconventional hydrocarbon resources.
CBM exploration could contribute to domestic gas availability and support the country’s efforts to strengthen energy security by developing indigenous sources of fuel.
The signing of the contract establishes the framework for OIL’s exploration and development activities in the block. The extent of recoverable gas reserves, investment requirements and the timeline for potential commercial production have not been specified.
OIL’s return to CBM exploration comes amid continuing efforts to expand domestic energy production and reduce dependence on imported fuels.