India unveils policy for shale oil and gas exploration

India has approved a policy to allow state-owned companies to start exploration for shale oil and gas, .

India is the world’s fourth-biggest energy consumer. The country intends to move slowly to seek alternatives to expensive oil imports.

On Sept. 24, the government agreed on a policy that will allow national oil companies to search for shale reserves on acreage already awarded to them.

According to the U.S. Energy Information Administration, India could be sitting on as much as 96 trillion cubic feet (tcf) of recoverable shale gas reserves, equivalent to about 26 years of its gas demand.

The policy marks a first step and covers only acreage in the hands of state-run explorers Oil and Natural Gas Corp. (ONGC) and Oil India Ltd., which were handed out when India first started a push to produce oil and gas.

Of about 356 blocks held by ONGC and Oil India, India’s upstream regulator has said 176 could hold shale resources. Contracts for these areas were awarded with a broad remit to look for petroleum, which was interpreted to include unconventional resources. The new policy effectively confirms that.

But the wording of contracts for blocks awarded later to companies such as Reliance Industries, BG and Cairn India specifies activity related to natural gas and oil. That has been interpreted as excluding unconventional energy, and the policy does not address these areas.

The oil ministry is proposing a uniform license for future acreage to cover oil, gas and unconventional resources and has asked for comments from companies before Oct. 15.

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