Shale gas fields next on the block

Encouraged by the US success in the area,India is stepping on shale gas,a potentially abundant,yet untapped source of energy. It is preparing to start auctioning the fields which could be rich in this resource for exploration....

Encouraged by the US success in the area,India is stepping on shale gas,a potentially abundant,yet untapped source of energy. It is preparing to start auctioning the fields which could be rich in this resource for exploration.

The governments intention and endeavour is to put in place a policy framework for effective exploration and production of shale gas in about a years time, Union petroleum minister Murli Deora said on Wednesday. Shale gas is natural gas found in shale rock formations. Indias shale gas reserves are estimated to be higher than its conventional gas reserves,although no definite assessment of the extractable quantity is available. Reliance Industries RIL,the first among Indian companies to take exposure to the business through its investment in US shale gas acreages,is believed to be best-placed to play a leading role when India starts offering shale gas blocks for exploitation. Multinational energy giants like Exxon Mobil and Royal Dutch Shell are also expected to join the shale gas fray in India.

The government will appoint an expert by early July to assess potential reserves and then create rules to tap unconventional energy sources before auctioning areas in about a year, Bloomberg reported on Wednesday.

Oil firms can soon choose blocks

Petroleum minister Murli Deora said on Wednesday that the government intends move to an open acreage licensing policy regime as soon as possible so that oil and gas exploration companies need not wait for annual auctions to stake claim for a particular block they are keen to contract. Meanwhile,the government on Wednesday allotted 17 blocks to ONGC,Oil India and NTPC and 14 to private and joint venture companies. The companies committed an investment of 1.1 billion in these blocks.

At present,the government auctions oil and gas blocks every year under the new exploration licensing policy Nelp. Under the new regime,companies can suggest any block for offer at any time,without waiting for the regular bid rounds under Nelp. The blocks will be awarded to the party giving the best bid,the minister said. For companies to review the prospects of a block,the government needs to compile scientific data about all the available blocks. Upstream oil regulator Director General of Hydrocarbons is in the process of creating such a database. The ninth round of auctions under Nelp expected in the third quarter of 2010-11 could perhaps be the last round of auctions under Nelp.