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New US-India shale pact impending

30th March 2012

India looks overseas to expand domestic shale production

US and Indian energy companies embarking on more and more mutually beneficial exploration projects

State-run Indian company, Oil & Natural Gas Corp will sign an agreement with ConocoPhillips to explore and develop shale-gas reserves and deep-water oil and gas blocks, it emerged on Friday.

The partnership could result in the ONGC offering equity stakes in some of its Indian blocks to the US-based ConocoPhillips, Dow Jones reported. 

The news comes a week after China National Petroleum Corporation (CNPC) agreed with Shell to explore, develop and produce shale gas in the Fushun-Yongchuan block in the Sichuan Basin, China.

India's recoverable shale-gas reserves could be 69 trillion cubic feet in four basins, according to the US  Energy Information Administration estimates.

The new pact, however, is likely to be broad memorandum of understanding, without any initial financial commitment. “We want their technology for deep-water and shale-gas exploration and development," said ONGC executives.

Indian exploration companies are increasingly looking to overseas oil and gas giants to help gain access to technology and expertise which could help increase domestic output and limit a fall in production on their home turf.

Reliance Industries Ltd., for example, last year sold a 30 per cent stake in 21 exploration blocks in India to BP PLC, including the massive D6 block off India's east coast, where Reliance is fighting a plunge in gas output.

ONGC's crude-oil output declined 6.3 per cent over four years to 24.42m tons, or 488,400 barrels a day, in the year ended 31 March 2011, from 26.05m tons, in the year ended 31 March 2007, said Dow Jones.


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