ONGC ventures into shale gas exploration

Oil and Natural Gas Corporation (ONGC) has ventured into shale gas exploration by spudding the first shale gas well near Durgapur in Burdwan district of West Bengal.

The country’s biggest energy explorer also notified two new discoveries in the KG onshore basin and Cambay Basin to upstream regulator Directorate General of Hydrocarbons.

ONGC has worked out a comprehensive shale gas pilot execution programme to test flow shale gas and learn about proprietary technologies, initially in the Damodar Valley basins.

The beginning has been made with the spudding of the first well. The contract has been awarded to leading oilfield services provider Schlumberger and a result of this well is expected by end of October, said a company release. In March this year, the ONGC board approved a pilot project for exploration of shale gas in the Damodar Basin at Rs 128 crore.

ONGC’s close competitor Reliance Industries has already made a significant presence in shale gas through the acquisition of three shale gas acreages in the US this year. Reliance invested $3.45 billion in the acquisitions.

Last month, Bharat Petroleum Corporation bought two exploration acreages of shale gas operated by Norwest Energy in Perth, Australia. The Indian government is planning to launch auction of shale gas blocks in August 2011.

Shale gas is a natural gas contained within shale formations. Shale gas exploration and production around the globe in general, and in the US in particular, has witnessed a surge in activity in recent times and is making substantial contribution to gas production to the extent that shale gas is often regarded as a game changer in the hydrocarbon industry. In the US, shale gas production contributes to nearly 17 per cent of their total gas production.