Private firms can explore for shale oil, gas: Moily

Indo Asian News Service

New Delhi, Sep 26 (IANS) Private sector energy firms would soon be allowed to explore for shale oil and gas from their existing fields, Petroleum Minister Veerappa Moily said Thursday.

"The cabinet has approved shale gas exploration policy for national oil companies, Oil India and ONGC. Soon, the same will be extended to other companies, including private energy players," Moily told media persons here on the sidelines of a conference.

The Cabinet Committee on Economic Affairs has Tuesday approved exploration and exploitation of shale gas and oil by national oil companies (NOCs) in blocks awarded to them on a nomination basis.

"Initially, I was in favour of an integrated shale gas policy for all players, but there were some issues to be resolved. We decided to move ahead with ONGC and OIL. At least one step forward is better than waiting," Moily said.

He said the government would also launch the tenth bidding round of oil and gas blocks after certain policy issues were resolved.

"We have nine rounds so far. Several issues came up in the NELP (New Exploration licensing policy) rounds.. We are working on the next round. The tenth will be the perfect round," Moily said.

The petroleum minister said the government would soon resolve differences over contractual provisions.

"I had a three and a half hour meeting with Reliance and BP last week. That shows we want to resolve the issues," he said.

Reliance Industries (RIL)- BP consortium operating the KG-D6 block in the eastern offshore, has evoked the arbitration clause of the contract after the petroleum ministry disallowed its expenditure in developing the D6 gas fields because of seriuos shortfall in output from the block.

RIL has also challenged the oil ministry's proposal to deny it the benefit of increased gas price from April 1.

Natural gas consumption in India during the current fiscal is expected to be around 104 billion cubic metres (bcm), against a production of 40.7 bcm.

The government has been taking steps to address the supply-demand gap, while encouraging shale gas exploitation is one among them.