3-phase plan for shale gas exploration by ONGC, OIL

ONGC would get 50 blocks in first phase, while another 75 blocks in second and 50 blocks in third phase

The ministry of petroleum and natural gas has finalised policy guidelines on exploration and exploitation of shale gas and oil by national oil companies under the nomination regime.

Based on this, Oil and Natural Gas Corporation (ONGC) would take up 175 blocks and Oil India Ltd (OIL) another 15 blocks, in three assessment phases. Both companies are state-owned.

According to an official source, ONGC would get 50 blocks in the first phase, 75 in the second and 50 in the third. OIL would get five blocks each in all three phases. Each assessment phase would be for three years. Companies would get the liberty to select petroleum exploration licence or mining lease areas, to be treated as blocks. One pilot well is compulsory in each block during the assessment phase, in every 200 sq km.

Shale gas is natural gas trapped within shale formations below the earth’s surface.

ONGC had already readied plans to drill four wells this year in the Cambay basin in a tie-up with ConocoPhillips. “We are planning to drill our first well next month and would drill around four wells this year, with an investment of about Rs 150-200 crore,” N K Verma, director (exploration), had told Business Standard. The government cleared the the shale gas policy last month.

ONGC has already tied up with ConocoPhillips to explore the Cambay, Krishna-Godavari, Cauvery and Bengal basins for shale gas. According to government estimates, the country has a potential to produce around 63 trillion cubic ft.

The government move is pushed by studies that at least 176 nomination blocks would have shale deposits. According to estimates by the US Energy Information Administration, this country has total reserves of 96 trillion cubic ft of recoverable shale gas. The government is planning to put at least 100 blocks for bidding in the next level, in Cambay, Krishna-Godavari and Ranigunj.