Cabinet nod for shale gas exploration on nomination basis

The Cabinet Committee on Economic Affairs Tuesday approved exploration and exploitation of shale gas and oil by national oil companies (NOCs) on acreages given on a nomination basis.

"This policy will allow NOCs to carry out exploration and exploitation of unconventional hydro-carbon resources particularly shale gas and oil in their already awarded onland Petroleum Exploration License/Petroleum Mining Lease (PEL/PML) acreages under the nomination regime," an official statement here said.

NOCs shall apply for grant of shale gas and oil rights in their acreages of interest and are required to undertake a mandatory minimum work programme, it said.

"The company (NOC) 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 and gas being produced from the respective areas," the statement added.

Natural gas consumption in India during the current fiscal is expected to be around 104 billion cubic metres (bcm), against a production of 40.7 bcm.

The government has been taking steps to address the supply-demand gap, while encouraging shale gas exploitation is one among them

The petroleum ministry plans to formulate a separate policy for private and foreign companies at a later date.

The government is also making efforts expand the natural gas pipeline infrastructure. Currently there are around 11,500 km of natural gas pipelines across the country, with another 12,650 km of pipeline being under construction.