Exploration, exploitation of shale gas and oil by NOCs under nomination regime

The Cabinet Committee on Economic Affairs (CCEA) today approved the proposal of the Ministry of Petroleum and Natural Gas on the policy of exploration and exploitation of shale gas and oil by National Oil Companies (NOCs) on acreages under the nomination regime.

This policy will allow National Oil Companies to carry out exploration and exploitation of unconventional hydro-carbon resources particularly shale gas and oil in their already awarded on land Petroleum Exploration License/Petroleum Mining Lease (PEL/PML) acreages under the nomination regime. The terms and conditions for guiding these activities are laid down in this policy.

The National Oil Companies shall apply for grant of shale gas and oil rights in their interested PEL/PML acreages and are required to undertake a mandatory minimum work programme. The company is permitted three assessment phases of a maximum period of three years each.

Royalty, cess and taxes would be payable at par with conventional oil/ gas being produced from the respective areas.

It is well acknowledged that production requirements and profile for shale oil and gas is different from conventional gas and oil. In view of this and the fact that the technologies required for production have been developed in the recent past, it was felt that a policy be put in place to achieve early development of these resources and to address issues arising out of EandP activities in shale gas and oil.