India To Announce Shale Gas Policy In Two Weeks

August 26, 2013

India has finalized its shale gas policy and it is likely to be taken to the cabinet for clearance in the next two weeks, oil secretary Vivek Rae told reporters on the sidelines of an industry event in Mumbai Thursday according to a reports from Platts.

"It is ready. We have to get cabinet approval," Rae said.

In the first round of shale gas exploration India would allow its state-owned E&P companies Oil and Natural Gas Corp Ltd and Oil India Ltd to prospect for shale gas within their existing acreage, Rae said. "There are around 150 blocks given to state-owned firms on nomination basis. In the first phase they would be allowed to prospect for shale gas," he said.

Nomination blocks were given to the state-owned E&P companies before India embarked on competitive bidding method to award blocks under the New Exploration Licensing Policy came into effect in 1999.

In the draft shale gas regulation policy circulated a year ago, the oil ministry had said that all areas allotted under the nomination basis, NELP rounds and also coalbed methane blocks awarded where development/production has started would be excluded from shale oil/gas exploration.

But a simultaneous exploration of hydrocarbons for the blocks in the exploration phase that is the conventional and shale gas/oil is possible. As per the draft policy the operators/contractors of the block would have the first right of refusal when shale gas/oil exploration award is given in the block or they can opt for co-development of the block.

India has so far held nine rounds of E&P block bids under NELP rounds and has awarded around 254 blocks. With tepid response for its last bid round in March 2011, India is yet to initiate its tenth round.

Rae said NELP 10 is likely to be conducted by December this year. He said the ministry would not wait for the recommendation of the Vijay Kelkar committee set in March this year to suggest way to enhance domestic oil and gas production and production sharing contract model.

Source: Platts, 2013.