India has significant shale gas resources but faces challenges in commercializing it. The document discusses India's energy scenario and dependence on imports. It outlines India's previous licensing policies and introduction of the New Exploration Licensing Policy to increase private investment. Unconventional sources like shale gas, coal bed methane and gas hydrates are discussed along with US success with shale gas extraction due to advanced techniques. India's shale gas basins hold an estimated 63 trillion cubic feet of technically recoverable shale gas. The document details India's phased program to assess shale gas potential and develop a shale gas policy with features like open bidding and contractual frameworks.

1. Prepared By,Prepared By,
Mithil Gandhi
gandhi.mithil@gmail.com
+91‐9819066954

2. dIndia – Energy Scenario
Pre‐NELP era of Indian E&P sector
NELP overviewNELP overview
Unconventional Energy in India & its commercialization
Shale Gas – Indian scenario
Shale Gas extraction challenges
US experience in shale gas
Way forward – GOI’s Shale Gas PolicyWay forward GOI s Shale Gas Policy

3. P i E Mi f I di (2012)
India is the 4th largest oil and gas
Primary Energy Mix of India (2012)
consumer in the world after USA, China
and Japan
Share of crude Oil and Gas in primary
energy consumption is about 40%energy consumption is about 40%
To deliver a sustained growth rate of 9%
through 2031‐32 with energy supply
growth of around 5.8% per year, it
estimated that,
India’s energy supply will need to
increase by 4 to 5 times
I l i i i i b 6Its electricity generation capacity by 6
to 7 times
(over its 2003‐04 levels)

4. I t t 76% il & 19%Import component: 76% oil & 19%
natural gas. These percentages are
projected to rise to 80% and 28%
respectively, by 2016‐17 p y y
Natural gas constitutes around 10%
of India's total primary energy
basket, which is well below the
world average of 23 7% in 2011world average of 23.7% in 2011.
Increase in demand driven by
Increasing population, economic
activity and rising income levels

5. During the period of 1980 to 1995, nine rounds of bidding took place
l k id ifi d f ff i l i i h O & O G h hBlocks were identified for offer in consultation with OIL & ONGC who were the
licensees
The main evaluation criteria was technical & financial capability and terms
offered to the govt. which was evaluated by ONGC & OIL.g y
Successful bidder after getting CCEA(Cabinet committee of economic affairs) had
to sign PSCs with Govt, OIL or ONGC
In the ninth round which was JV round in which PSUs were to have participating
interest of 2 5 to 40% in the JV th s sharing e ploration costinterest of 2.5 to 40% in the JV, thus sharing exploration cost

6. T t th i t t N E l ti & Li i P li (NELP) i t d dTo step‐up the investment, New Exploration & Licensing Policy (NELP) was introduced
by GOI in 1998 with following features,
Private & public sector companies will be treated at par & all acreage will be given p p p g g
market driven price for oil & natural gas produced
Fiscal stability in the contract was provided along with Petroleum Tax guide to
facilitate investors
Finalization of contract on basis of Model Production Sharing Contract (MPSC)Finalization of contract on basis of Model Production Sharing Contract (MPSC)
Freedom sell crude oil & natural gas in the domestic market at market related
prices
No customs duty on imports for petroleum operations & No cess of crude oil
production
7 yrs tax holiday & option to amortize exploration & drilling expenditures over a
period of 10 yrs from the commencement of production
Royalty Payment for crude oil & natural gas on ad‐valorem basisRoyalty Payment for crude oil & natural gas on ad valorem basis

7. India has typically three major sources of non conventional energyIndia has typically three major sources of non‐conventional energy,
Gas Hydrate: Low production rate, absence of similar hydrates in any other part of
world & environmental hazards make Gas Hydrate difficult for Methane extraction.
Good amount of R&D initiatives are undertaken to develop technology &Good amount of R&D initiatives are undertaken to develop technology &
commercialize it. However, it looks difficult to commence production as per Govt’s
deadline of 2015
CBM: Coal bed Methane (CBM), is an eco‐friendly natural gas, stored in coal seams, ( ), y g , ,
generated during the process of the coalification. Having the 3rd largest proven coal
reserves, India has significant prospects for commercial recovery of CBM.
Indian CBM policy, which was implemented in 2001, is one of the most investor
friendly policies in the world with four rounds of successful bidding till date
Shale Oil & Gas: Oil Shales are usually fine‐grained sedimentary rocks containing
relatively large amounts of organic matter from which significant quantities of shale
il d b ibl b d b d i di ill ioil and combustible gas can be extracted by destructive distillation.

8. As per the EIA these basins have shale gas resource of the order of 290 tcfofAs per the EIA, these basins have shale gas resource of the order of 290 tcfof
which 63 tcfis technically recoverable.
Phase‐I (Sept.2007 to October 2009) :
The contract was signed for project envisaging assessment of oil shale resourcesThe contract was signed for project envisaging assessment of oil shale resources
in three discrete adjacent blocks in Assam and Arunachal Pradesh.
The project scope included geological mapping, sampling and geochemical
analysis of oil shale, shallow geophysical survey, shallow drilling for characterizing
th il h l d l t f 3 D d l d li i i t l t dithe oil shales, development of 3‐D model and preliminary environmental studies.
Phase‐II (November 2009 to October 2011)
Techno‐economic feasibility study for extraction along with environment impact
t d ti f d l PSC & l f M EFstudy, preparation of model PSCs & necessary clearances from MoEF.
Framing of legislation for simultaneous extraction of coal and oil shale deposits
Phase‐III (November 2011 to 2013)
Sh l G P liShale Gas Policy

9. Mit h ll E d i 1980 1990 d d h l d tiMitchell Energy during 1980s‐1990s made deep shale gas production a
commercial reality in Barnett Shale.
By 2005, Barnett Shale alone produced shale gas over ½ tcf/yr, which increased to
over 5 tcfin 2011‐(22% of gas production) ( g p )
Technically recoverable U.S. shale gas resources estimated at 862 tcf, which is 34
% of the domestic natural gas resource base.
US drilled over 40,000 wells in different shales. Currently, operators in US deploy
over 1500 rigs for shale gasover 1500 rigs for shale gas
A close network of pipelines measuring over 600,000 km exists for off‐taking of
the gas to the market.

10. Technical Skills
I f t tInfrastructure
Land Acquisition
Water ManagementWater Management
Environmental Aspects
Pipeline InfrastructurePipeline Infrastructure

11. Govt of India is going to release Shale Gas Policy in 2013 The proposed policy will haveGovt of India is going to release Shale Gas Policy in 2013. The proposed policy will have
following features,
The offer of acreages under this policy would be made through an open International
Competitive Bidding (ICB) processCompetitive Bidding (ICB) process.
The successful bidders would be required to enter into a contract with the
Government, which will be negotiated based on the Model Contract (MC).
Simultaneous Exploration of conventional Oil and Natural Gas, Coal Bed Methane
(CBM), tight gas and Shale Oil and Gas from the same contract area by same/ different ( ), g g y /
operators will be governed by the relevant policy of the Government of India.
All areas which are already allotted and where operations have entered the
development phase shall be excluded from area to be offered for shale gas exploration.
As financial and contractual regime for conventional oil and gas and shale oil and gas
are different, in case of the same contractor operating both the blocks, the policy will
be to adequately ring fence the two so that two distinct accounts are maintained,
without affecting each other.
All data gathered during the course of operation shall be the property of the GOI.
G f I di ill ll l d i l b i dGovt. of India will ensure all statutory, regulatory and security clearances are obtained
before bidding.

12. Thank YouThank You