India Approves Shale Oil and Gas Exploration Program

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The Indian Cabinet Committee on Economic Affairs (CCEA) has approved the shale gas and oil exploration program. As fuel shortages and power outages are hampering power generation and industrial growth, the CCEA hopes to boost domestically sourced supplies and curb the importation of hydrocarbons, which causes financial strain.

The U.S. Energy Information Administration (EIA) estimated that India could have a possible 96 trillion cubic feet of gas, which is equivalent to 26 years of the country's gas demand.

The CCEA's green light will allow national oil companies to perform exploration and exploitation of unconventional hydrocarbon resources, particularly shale gas and oil, in their already-awarded acreages, under the petroleum exploration/mining lease nomination procedure.

Six basins hold shale gas potential: Cambay (Gujarat); Assam-Arakan (in the northeast); Gondawana (central); KG onshore (Andhra Pradesh); Cauvery onshore; and Indo-Gangetic.

Oil and Natural Gas Corporation (BSE:500312) (Dehradun) and Oil India Limited (BSE:533106) (Noida), both state-owned, have been permitted to explore and produce shale oil and gas. Of the 356 blocks held by the two companies, 176 could hold shale resources.

The government will offer shale and gas blocks to other companies by means of an auction, planned to take place after the new policy is approved by the cabinet in the coming weeks.

Oil imports into India reached a record $144.3 billion in the year ending March, representing 8% of GDP. The target is to reduce oil imports 50% through 2020 and 100% by 2030.

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