India Explores Unconventional Energy Resources

Shale Gas that has huge potential refers to natural gas trapped within Shale formations – the fine-grained sedimentary rocks, which can be rich sources of petroleum and natural gas. India has an estimated 96 trillion cubic feet (tcf) of recoverable Shale gas reserves, found mainly in Tamil Nadu, Andhra Pradesh and Rajasthan. Krishna-Godavari (KG) basin, located in eastern India, encloses a series of organically rich Shale formations containing around 27 tcf of technically recoverable gas, holding country’s largest Shale gas reserves, extending over 7,800 gross square miles with a prospective area of 4,340 square miles. Horizontal Drilling and Hydraulic Fracturing has allowed access to large volumes of Shale gas that were previously uneconomical to produce.

• Crude oil imports by China, India, Japan and South Korea alone make up more than 20% of global demand.
• India is the third-largest energy consumer in the world after China and the United States and India’s energy consumption growth is projected at 4.2% per year, which is forecast to be the fastest among all major economies.
• India’s increased domestic energy production is expected to fall short of robust energy demand, pushing it to energy imports that could risk its fiscal stability.
• India imports 81% of its oil needs.
• The production of natural gas from Shale formations has rejuvenated the natural gas industry in the United States.
• This has prompted the Indian government to explore unconventional energy resources, such as Shale gas, coal bed methane, and gas hydrates in India to meet its objective of moving towards a gas-based economy.
• India’s Ministry of Petroleum and Natural Gas is working with US Energy Department to intensify the work on development of Shale gas in coastal India with US companies joining the exploration process to meet its energy requirements at affordable prices while using cleaner fuels.
• India has decided to reset its energy basket in a significant way, wherein the role of natural gas would be significant.

Government of India had announced on October 14, 2013, Policy Guidelines for Exploration and Exploitation of Shale Gas and Oil by National Oil Companies (ONGC and Oil India Limited (OIL)) in their on-land Petroleum Exploration License (PEL) / Petroleum Mining Lease (PML) areas   awarded under the nomination regimes. In pursuance of this Policy, under Phase I of assessment, ONGC identified and initiated shale gas and oil   exploration activities in 50 PEL/PML areas; and OIL identified and initiated Shale gas exploration activities in 6 PEL/PML areas. The State-wise details of the identified Shale gas blocks were 28 Gujarat, 10  Andhra Pradesh, 9 Tamil Nadu, 6 Assam, 2 Arunachal Pradesh and 1 Rajasthan.

ONGC has drilled 20 assessment wells for Shale gas and oil. OIL has completed G&G studies and geochemical analysis in its identified areas. Further, OIL has completed Conventional Core in one well in Rajasthan.

In Phases II and III ONGC will carry out exploration in 75 and 50 blocks, respectively, while OIL will carry out exploration in 5 blocks each in Phase II and III.

Government has also approved a Hydrocarbon Exploration and Licensing Policy (HELP) to promote exploration and exploitation of unconventional hydrocarbon resources such as CBM, Shale oil & gas, wherein companies can explore and produce all kind of hydrocarbons including Shale oil/gas, CBM & gas hydrate, etc. under single license.