India advances coal-bed methane development through latest acreage allocation rounds

Summary

• Private sector participation: Companies including Reliance Industries Limited and Essar Group have participated in recent coal-bed methane (CBM) exploration and development acreage allocation rounds under India’s Open Acreage Licensing Policy (OALP).
• Sector structure: Participation has been led primarily by private operators and joint ventures, while public sector involvement varies by block and basin strategy.
• Energy diversification: CBM is part of India’s broader strategy to increase domestic natural gas production and reduce reliance on imported LNG.

NEW DELHI, April 20, 2026 — India’s efforts to expand domestic natural gas production have seen continued interest in coal-bed methane (CBM) exploration under the Open Acreage Licensing Policy (OALP), with private sector companies playing a key role in recent bidding rounds.

According to industry and policy updates, firms such as Reliance Industries Limited and Essar Group have shown participation in CBM-focused acreage, particularly in coal-rich basins across central and eastern India.

CBM development focus

Coal-bed methane extraction involves producing natural gas trapped within coal seams and is considered part of India’s unconventional hydrocarbon resources strategy.

The Directorate General of Hydrocarbons (DGH) oversees the allocation process under OALP, which allows companies to select and bid for exploration blocks based on available geological data.

However, block participation and bidding outcomes vary widely, and not all offered blocks receive bids due to commercial viability and infrastructure constraints.

Sector participation trends

Private companies have increasingly participated in CBM and unconventional gas assets due to pricing freedom under India’s gas marketing reforms.

Public sector companies such as Oil and Natural Gas Corporation Limited and Oil India Limited continue to focus on a mix of conventional and unconventional assets depending on basin economics and portfolio priorities.

Infrastructure and commercial challenges

Despite growing interest, CBM development faces challenges including pipeline connectivity, water management, and variable gas yields across blocks.

These factors have led to selective bidding, with some blocks receiving limited or no interest in certain auction rounds.

Why this matters

• Energy diversification: Supports India’s goal of increasing domestic natural gas production
• Import substitution: Helps reduce reliance on imported liquefied natural gas (LNG)
• Private investment role: Highlights growing participation of private sector in upstream gas exploration
• Infrastructure gap: Shows the importance of midstream connectivity for monetization of resources

FAQs

Q1. What is coal-bed methane (CBM)?

CBM is natural gas (mainly methane) extracted from coal seams, produced by lowering pressure in coal beds through drilling.

Q2. Why is CBM important for India?

It helps increase domestic natural gas supply and reduce dependence on imported LNG.

Q3. Why are some blocks not receiving bids?

Due to commercial viability concerns, infrastructure limitations, and geological uncertainty.