The government on Tuesday approved the long-awaited shale gas and oil exploration programme that will allow state-owned oil companies to carry out exploration and production of shale gas from onland blocks.
In the first phase, state-owned Oil and Natural Gas Corporation (ONGC) and Oil India Limited (OIL) have been permitted to explore and produce shale oil and gas from blocks allotted on a nomination basis before advent of the New Exploration Licensing Policy in 1999.
“This policy will allow national oil companies (NOCs) to carry out exploration and exploitation of unconventional hydrocarbon resources particularly shale gas and oil in their already awarded onland Petroleum Exploration License/Petroleum Mining Lease (PEL/PML) acreages under the nomination regime,” an official statement issued after the Cabinet Committee on Economic Affairs (CCEA) meeting said.
The government will offer shale oil and gas blocks to other companies through an auction planned after such a policy is taken to the Cabinet for approval in the next few weeks.
The statement said NOCs shall 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.
They will be 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.