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India clears shale policy

26th September 2013

Indian oil companies will be allowed to pursue extraction of shale oil and gas in the country

India clears shale oil policy
ONGC and OIL will explore shale resources from land blocks allotted to them

India has taken its first steps to open its potentially vast shale resources, as the Indian government on Tuesday approved a long-awaited shale oil and gas exploration policy that will allow the extraction of unconventional hydrocarbon resources from six basins across the nation.


The policy is being divided into two phases. The first will allow state-run Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) to explore shale resources from land blocks allotted to them in their PEL/PML lease.


"This policy will allow national oil companies (NOCs) to carry out exploration and exploitation of unconventional hydrocarbon resources particularly shale gas and oil in their already awarded on land Petroleum Exploration License/Petroleum Mining Lease (PEL/PML) acreages under the nomination regime," an official statement issued by the government after the cabinet committee on economic affairs (CCEA) meeting said.


The second phase involves offering shale oil and gas blocks to other companies via CCEA approval. Potential NOCs will be able to apply for shale oil and gas rights in a particular sector and also will be required to undertake a mandatory minimum work programme.


Following both phases, companies will be permitted three assessment phases of a maximum of three years each in length.  Royalty, cess and taxes will be payable at a par with conventional oil/gas being produced from the respective areas.

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