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Shale gas policy: Existing operators to get upper hand

Will look into possibility of clubbing exploration rights of areas where shale overlaps with existing oil, gas blocks

Shine Jacob  |  New Delhi 

In a boost to existing and companies, the shale development policy would look into the possibility of clubbing the rights of areas in which shale blocks overlap with existing and blocks. It is likely the policy would be taken up by the Cabinet soon.

The bidding process is expected to start within the first half of this financial year. At least 100 blocks would be up for grabs, said an official in the know. The blocks would cover the three major basins of Cambay, Krishna Godavari and Ranigunj (part of the 26 sedimentary basins in India). While the total recoverable resource in these three basins would be 12-15 trillion cubic feet (TCF), immediately recoverable resource would be in the range of two to six TCF. In the initial stage, the investment is likely to stand at about $2 billion.

Giving an upper hand to players such as Reliance and ONGC, which have operations in these basins, the policy would offer the first right of refusal to the existing and gas or coal bed methane contractor to match the offer of the selected bidder, in case a shale block overlaps with it, said an official. Even if the operator refuses, a co-development model would be mooted for simultaneous

A private operator in the basins of Cambay, Krishna Godavari and Ranigunj said, “The government is yet to come up with the policy. But if it can club shale with oil and gas blocks, it would be of great help to existing operators.”


Earlier, Petroleum and Natural Gas Minister M Veerappa Moily had said the policy would be before the Cabinet within a few days.

Speaking on the sidelines of a Confederation of Indian Industry event, Petroleum Secretary Vivek Rae said, “We want to empower the existing operators. The policy would be ready in a month or two. We have expected shale gas reserves in at least 250 existing oil and gas blocks.” According to government estimates, a few basins in India together have a potential to produce 63 TCF of shale gas, while it has a total shale potential of close to 300 TCF. Experts say shale gas and oil reserves are expected to be present in at least 11 more basins across the country.

Shale gas is natural gas trapped in sedimentary rocks (shale formations) below the earth’s surface. In North America, it contributes to a substantial part of that regions’ energy requirement. Major basins in India with potential shale reserves include Cambay, Gujarat, Assam-Arakan in the Northeast, Gondawana in central India, Krishna Godavari in Andhra Pradesh, Cauvery onshore and the Indo-Gangetic basins.

10th round of in FY14

The government is set to come up with the 10th round of the New Exploration Licensing Policy this financial year, Petroleum Secretary Vivek Rae said at a Confederation of Indian Industry meeting. “We are trying to address certain critical issues such as removing the bottleneck for clearances and developing national data on the oil and gas assets we have. Domestic production needs to be ramped up. Otherwise, the country’s dependency on imported oil is expected to stand at about 85 per cent by the end of 12th five-year Plan,” he said.

First Published: Thu, April 04 2013. 00:35 IST
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