New Delhi [India], October 18 : State-owned Oil India Limited (OIL) has signed a revenue-sharing contract for a 272.14 sq km coal-bed methane (CBM) block in the Singrauli coalfield region, marking its return to exploration of the unconventional natural gas resource.
The agreement, signed on October 15 and disclosed through a regulatory filing to stock exchanges on Sunday, is part of the company's efforts to diversify its energy operations and explore domestic gas resources.
In its official press release, Oil India said it had achieved a significant milestone with the signing of the "Revenue Sharing Contract (RSC) for Special Coal Bed Methane (CBM) Block SR-ONHP-(CBM)-2026/1 on 15-10-2026."
The block covers an area of 272.14 sq km and has geological characteristics that the company considers favourable for methane exploration.
According to the release, the block "exhibits promising geological prospects, with expected coal seam depths of 600-800 metres and an average seam thickness of around 40 metres."
Coal-bed methane is a form of natural gas trapped within coal seams. Its exploration offers an additional source of domestic gas, which can help India diversify its energy supplies and reduce dependence on imported fuels.
The development is significant as Oil India seeks to expand beyond conventional oil and gas exploration into unconventional hydrocarbon resources.
The company described the agreement as a "landmark return to Coal Bed Methane (CBM) exploration," highlighting its focus on tapping India's unconventional hydrocarbon potential and strengthening energy security.
The contract-signing ceremony was attended by Union Petroleum and Natural Gas Minister Hardeep Singh Puri, Petroleum Secretary Neeraj Mittal and Directorate General of Hydrocarbons Director General V Ponnuraj.
Oil India was represented by its Director (Operations), Trailukya Borgohain, and his team.
However, the company has not disclosed estimated recoverable gas reserves, planned investment or a timeline for commercial production from the block.
The commercial potential of the project will depend on further exploration and assessment of the coal seams.