In order to boost domestic shale gas and oil output and to meet the growing energy needs of the country, the Cabinet Committee on Economic Affairs (CCEA) has approved the long-awaited shale gas and oil exploration policy. As per the policy, national oil companies (NOCs) such as state-owned Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) have been permitted to explore and produce shale oil and gas from already awarded onland Petroleum Exploration License/Petroleum Mining Lease (PEL/PML) acreages under the nomination regime.
Further, CCEA in a statement, said that NOCs shall apply for grant of shale gas and oil rights in their interested PEL/PML acreages and taxes, royalty and cess would be payable at par with conventional oil and gas being produced from the respective areas. The oil companies are required to undertake a mandatory minimum work programme and also permitted to explore and produce oil and gas under three assessment phases of a maximum period of three years each.
Shale gas or natural gas trapped in sedimentary rocks (shale formations) below the earth's surface is seen as a new alternative to conventional oil and gas for meeting growing energy needs. Shale gas has become an increasingly important source of natural gas in the United States over the past decade, and now interest has spread to potential shale gas reserves in Canada, Europe, Asia, and Australia. It is estimated that recoverable reserves of shale gas in India is between 6 trillion cubic feet and 63 trillion cubic feet. Meanwhile, oil ministry has formulated a roadmap for cutting India's dependence on imports to meet its oil needs. India currently imports around 79 percent of its oil needs and the Ministry wants this to be cut to 50 percent by 2020 and by 75 percent in 2025 through intensive exploration and exploitation of untapped reserves.
