The Indian government plans to permit private companies to exploit shale reserves in their oil and gas blocks by amending the definition of petroleum in the statutes to include the unconventional resource.
The proposed change will help E&P players such as Vedanta, Essar and Reliance Industries Ltd (RIL) explore and exploit their shale reserves, financial daily The Economic Times has reported, quoting unnamed officials in the Ministry of Oil and Natural Gas.
The ministry has reportedly sought the views of the law and coal ministries on its proposal.
The new Hydrocarbon Exploration and Licensing Policy (HELP) that was unveiled in March 2016 permits simultaneous E&P of unconventional and conventional oil and natural gas.
However, ongoing E&P activities are governed by shale policy formulated in 2013 under which only state-owned national oil companies (NOCs) India Oil & Natural Gas Corp (ONGC) and Oil India Ltd (OIL) are allowed to explore for the energy resource.
Private entities have been kept out owing to fears of environmental damage. Paradoxically, the latest Ministry of Oil and Natural Gas proposal for inclusion of shale has happened even as ONGC is contemplating shelving its shale plans.
This was stated last month by ONGC chairman and managing director Shashi Shanker. “We have drilled around 22-23 wells as part of our shale gas exploration programme. We have had some limited success and the results are not very encouraging,” said Shanker.
On the other hand, post the formulation of HELP, Essar Oil, Cairn, RIL and other private companies have sought approval to exploit shale reserves in their assets.
RIL has experience in the field courtesy of its shale ventures in the US. Essar Oil has made an assessment of in-place shale gas resources of about 7.7 tcf (218 bcm) below its coal-bed methane (CBM) field in Raniganj, West Bengal.
The shale reserve could double the output from Essar’s Raniganj block, which has recoverable reserves of 1.1 tcf (31.1 bcm) of CBM. Essar has cited synergies in developing shale gas and CBM.
Water produced during CBM extraction could be deployed for shale hydraulic fracturing, while the gas evacuation infrastructure could also be common. Meanwhile, Great Eastern Energy Corp. Ltd (GEECL), India’s earliest producer of CBM, has plans to invest US$1 billion across the unconventional space, including shale gas.
In its 2016-17 annual report, quoting estimates by Schlumberger, the Ministry of Oil and Natural Gas pegged India’s shale gas resources at 300-2,100 tcf (8.49-59.4 tcm). In 2013, the US Energy Information Agency (EIA) estimated technically recoverable resources of shale gas in India at 63 tcf (1.78 bcm).