'Laws are keeping pace with emerging market needs'
June 24 2008 -An Interview with Mr. Prashant Modi, the President and COO of GEECL (Great Eastern Energy Corporation Limited)
The Great Eastern Energy Corporation Limited (GEECL) is planning to extend its operations and supply compressed natural gas (CNG) to Kolkata. The country’s first commercial producer of coal-bed methane (CBM) is already selling CNG from the Indian Oil Corporation’s stations in places like Asansol, Durgapur and Raniganj. A part of the YKM Holdings Group, GEECL is developing production wells for CBM in Damodar Valley (Raniganj coal-field), near the city of Asansol, West Bengal. Thirty wells have been drilled so far. The company’s licence area covers 210 sq km. (52,500 acres). The first phase will see drilling and completion of 100 production wells. The company is planning to drill a total of 200 wells in a phased manner. GEECL president and chief operating officer Prashant Modi (http://www.prashantmodi.com) talks to Financial Express’ about the company’s progress and plans. Excerpts:
How is GEECL progressing?
We have already drilled about 30 wells. We are on our 31st well in India.
What is the overall plan?
We’ll drill 80 wells in the coming two years. In the next six years we will do another 200. The plan is to dig 40-50 wells a year after that. The total number of wells is expected to be around 300. As you keep drilling more and more, 300 can become 330 or 270. It’s important to see if the well is economical to drill.
What is the total production capacity in the first phase?
The first stage will cover 100 wells and generate 35-40 million cubic feet of gas per day. Eventually it will be 100 million cubic feet when all the 300 wells are operational. I am talking about average production. In CBM, the production increases for the first three/four years, then it stabilises. So, it is like a camel hump.
What is the total investment?
The total investment will be close to $1 billion over the next five years. After that the company will start generating cash. The investment is divided in three parts— upstream, midstream and downstream. Now, we are doing everything ourselves. Earlier we were thinking about having subsidiaries, but then it doesn’t make sense. This has become a one-stop shop sort of business.
How are you raising money?
We have just raised loans of Rs 350 crore from SBI and nine other banks. After that the company will generate enough cash to fund itself. As far we are concerned we are fully funded now. If we acquire...
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