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    India Allows Shale, CBM Exploration Under Existing Licences

Summary

Indian cabinet has allowed oil and gas exploration companies to explore for unconventional hydrocarbons under their existing contracts.

by: Shardul Sharma

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India Allows Shale, CBM Exploration Under Existing Licences

Indian cabinet has allowed oil and gas exploration companies to explore for unconventional hydrocarbons like shale gas and coalbed methane (CBM) under their existing contracts, the Indian government said August 1.

The exploration “will be carried out under the existing production sharing contracts (PSCs), CBM contracts and nomination fields to encourage the existing contractors in the licensed/leased area to unlock the potential of unconventional hydrocarbons in the existing acreages,” the government said.

As per existing contractual regime of PSCs, existing contractors are not allowed to explore and exploit CBM or other unconventional hydrocarbons in already allotted licensed/leased area. Similarly, CBM contractors are not allowed to exploit any other hydrocarbon except CBM. Acreages held at present by various contractors in PSCs and CBM blocks and national oil companies (NOCs) in nomination regime constitute a significant part of India’s sedimentary basin, according to the government.

The government is of the view that this policy will enable the realisation of prospective hydrocarbon reserves in the existing contract areas which otherwise would remain unexplored and unexploited.

“Exploration and exploitation of additional hydrocarbon resources is expected to spur new investment, impetus to economic activities, additional employment generation and thus benefitting various sections of society. This will lead to induction of new, innovative and cutting-edge technology and forging new technological collaboration to exploit unconventional hydrocarbons,” the Indian government said.

According to the government, India’s shale gas reserves are in the range of 100tn ft3 and 200tn ft3.