Govt to award shale gas, oil acreages to state-run explorers on nomination basis

The cabinet committee on economic affairs (CCEA) has approved the proposal of the ministry of petroleum and natural gas for awarding shale gas acreages for exploration and exploitation to nominated state-run oil exploration companies.

This policy will allow state-run oil and gas explorers to carry out exploration and exploitation of unconventional hydro-carbon resources, particularly shale gas and oil, in their already awarded on-land petroleum exploration license / petroleum mining lease (PEL/PML), the CCEA said.

CCEA said the policy guidelines have laid down the terms and conditions for undertaking these activities.

State-run oil explorers have to apply for grant of shale gas and oil rights in their interested PEL/PML acreages and are required to undertake a mandatory minimum work programme.

The company is permitted three assessment phases of a maximum period of three years each.

Royalty, cess and taxes would be payable at par with conventional oil/ gas being produced from the respective areas.

In view of the differences in production requirements and profile for shale oil and gas compared to conventional gas and oil production, the government has to make sure that the technologies required for production have been developed in the recent past.

Accordingly, it was felt that a policy be put in place to achieve early development of these resources and to address issues arising out of E&P activities in shale gas and oil, CCEA said.