“While commercial operations would take time to start, India’s Oil and Natural Gas Corporation (ONGC) has struck the first shale gas in a pilot project at Ichhapur in Burdwan, West Bengal. Its drilling started on October 27, 2013, with ConocoPhillips, which helped ONGC in providing technical help in well planning and data evaluation stage. In addition, ONGC has spudded one more well for shale gas and oil exploration in Gandhar area of Cambay basin.”
Shale gas can emerge as an important alternative source of energy in India. Identified shale-gas formations are spread over several sedimentary basins of the country, such as Cambay, Gondwana, Krishna Godavari Onland, and Cauvery. Shale oil is less developed. 
Shale gas is important because India wants to add natural gas’s 7 percent share of its energy basket, now filled with coal and oil. Increasing the share of natural gas would offer cleaner, cheaper and easier supply of energy resource in India, given the lesser quantum of emission it generates compared to coal and oil. India is striving to enhance the share of cleaner energy fuels, but natural gas promises to be the real game changer.
According to BP Statistical Review of World Energy, India’s natural gas share in primary energy consumption still hovers around 7 percent (LNG), against 28 percent for oil and 56 percent for coal. With conventional gas production already declining and the shale boom of the U.S., the government has been compelled to look for unconventional energy resources such as shale gas/oil as well.
Inspired by the US shale boom, the Government of India has already initiated the process of shale gas resource assessment and identification of prospective areas for shale gas exploration. In this regard, it has initiated steps for development of shale oil and gas from on land sedimentary basins.
On December 6, 2010, Memorandum of Undertaking (MoU) was signed between The Ministry of Petroleum and Natural Gas (MOPNG) (Government of India) and the US Department of State for cooperation in shale gas resource assessment, technical studies, regulatory framework consultations, training and investment promotion through exchange of experiences and best practices and through study tours.
Per the MOU, three Technical Workshops have been held in January, 2011, May 2011, and Aug 2012 on Resource assessment between United States Geological Survey (USGS) and Directorate General of Hydrocarbons (DGH) & Multi-organization Team (MOT) members (ONGC, GAIL and OIL). USGS has submitted results on resource Assessment in January 2012 for three basins. Studies for Resource assessment of Shale Oil is in progress.
On regulatory issues, video conferences have been held with representatives of the US, along with visits of India’s delegation to the US and the US delegation to India. The Draft Policy on Exploration and exploitation of Shale Oil & Gas was put on the MoPNG/DGH website for comments of all stakeholders. The comments have been received and policy is under formulation.
Based on the geo-scientific data collected during the exploration of conventional oil and gas, assessments have been made regarding the possible potential of shale gas resources in the Indian sedimentary basins as estimated by various agencies from time to time.
In January 2011, Schlumberger made an initial gas-in-place estimate of 300-2,100 trillion cubic feet (TCF), under shale gas pilot project for ONGC in Damodar Valley basin.
In April 2011, a study conducted by the Energy Information Administration (EIA), the US assessed risked gas-in-place of 290 TCF with technically recoverable resource of 63 TCF for 4 (Cambay Onland, Damodar, Krishna Godavari Onland & Cauvery Onland) out of 26 sedimentary basins in India. This was upgraded to 584 TCF in 2013 by the EIA, in addition to putting shale oil estimates at 87 billion barrels.
In a study conducted by the USGS in 2011/12, technically recoverable resource of 6.1 TCF has been estimated in 3 sedimentary basins (Cambay Onland, Krishna Godavari Onland & Cauvery Onland), while indicating huge shale oil potential in Indian Basins as well.
In the year 2013, both ONGC and Central Mine Planning and Design Institute (CMPDI) came up with their shale estimates. While ONGC put the shale gas estimates to 187.5 TCF of shale gas in 5 basins namely, Cambay, KG, Cauvery, Ganga & Assam and Assam – Arakan, CMPDI had estimated 45 TCF of shale gas in six sub basins (Jharia¸ Bokaro, North Karanpura, South Karanpura, Raniganj & Sohagpur).
Though it is difficult to arrive at the hydrocarbon potential of an area, several agencies have put up varying estimates for shale gas potential. These shale gas reserve potential could be upgraded with further exploratory drilling.
Soon after these estimates were calculated, the government on October 14, 2013, announced “Policy Guidelines for Exploration and Exploitation of Shale Gas and oil by National Oil Companies under Nomination regime,” allowing two National Oil Companies (NOCs) namely, Oil and Natural Gas Corporation Limited (ONGC) and Oil India Limited (OIL) to carry out shale gas exploration in 50 and 6 blocks respectively in the first phase.
These 56 petroleum exploration lease (PEL) / petroleum mining lease (PML) blocks are located in the states of Assam (7 blocks), Arunachal Pradesh (1 block), Gujarat (28 blocks), Rajasthan (1 block), Andhra Pradesh (10 blocks) and Tamil Nadu (9 blocks).
While commercial operations would take time to start, India’s Oil and Natural Gas Corporation (ONHC) has struck the first shale gas in a pilot project at Ichhapur in Burdwan, West Bengal. Its drilling started on October 27, 2013, with ConocoPhillips, which helped ONGC in providing technical help in well planning and data evaluation stage. In addition, ONGC has spudded one more well for shale gas and oil exploration in Gandhar area of Cambay basin.
Recently, out of the 50 wells, for which ONGC has to identify and submit proposals, it has decided to drill 17 assessment wells to assess the shale gas/oil potential in Cambay (11 wells), Krishna-Godavari (5 wells) and Cauvery basin (1 well) nominated blocks. The estimated cost of these 17 wells is pegged at Rs 625 crores.
Besides, ONGC there are other companies in both the private and public sector undertakings which have initiated cooperation with the U.S., including investments in their shale plays and taking stake in LNG terminals.
Drilling Phase Underway
In 2011, for instance, Oil India Limited (OIL) hired the services of Schlumberger Asia to carry out a feasibility study for its shale gas reserves in Assam and Rajasthan. Further, in order to explore shale oil and gas options in its own blocks in Arunachal Pradesh and Assam, OIL, has sought permission from the government to drill in these states in 2015.
Reliance Industries Limited, on the other hand, signed three upstream joint ventures, namely, Chevron, Pioneer Natural Resource, and Carrizo Oil & Gas, and a mid-stream joint venture, Pioneer (which has now been sold), to carry out operations in the U.S.
Gail Authority of India Limited (GAIL), which is in the pipeline business, has also marked its presence globally. Some of those ventures include successful securing of LNG under a long term agreement from suppliers like Sabina Pass and Dominion of the U.S. to the tune of 3.5 million metric tons per annum (MMTPA) and 2.3 MMTPA respectively. Recently, GAIL became the first company in Asia to import LNG from the U.S. shale gas from Sabina Pass, which is bought on a spot basis.
Therefore, from the above, it can be concluded that India is seriously looking into expanding shale gas options and not confining itself to just exploring this resource indigenously, primarily with the help with the U.S., but also staking claims in several shale gas assets and LNG terminals in this country.
But despite this effort, which primarily remains on a pilot basis, India has to face the foremost challenge of the availability of two precious resources, namely, water and land, which are needed in abundance to make shale gas business to happen.
In all these places, such as Cambay, Gondwana, and Krishna-Godavari and the Indo-Gangetic plains, where there are shale gas reserves, the problem of water stress is prevalent. India would rather work out water-less fracking techniques at the outset, while concurrently discovering shale deposits.
Thus, the shale gas business in India is still at a nascent stage and until the time that new techniques like water-less extraction develop and can be used in a more feasible way, India would not mind importing LNG through more diversified sources, including the U.S., to make the maximum out of low international gas prices. This will, on the other hand, prompt India to strengthen its natural gas infrastructure, including regassified LNG terminals, floating terminals, and a natural gas pipeline network.
In addition to water, another challenge for new shale gas production is land, or really access to the subsoil where the minerals reside.
In the US, underground resources are owned by landowners who happily provide access to exploration and production for a signing bonus and royalties. In India, the government has a monopoly which owns what is below the surface. Hence no incentives to the landowners at all.
Moreover, acquiring land for fracking is a contentious issue in India due to the shortage of available land and densely populated region such as Damodar Valley and Gangetic basin, where shale gas prospects are present.
 In addition to shale gas estimates, the initial estimates of shale oil as provided by the EIA in 2013 suggests around 87 billion barrels of shale oil in four basins in India namely, Cambay Onland, Damodar, Krishna Godavari Onland & Cauvery Onland. During the same year USGS also found technical recoverable mean volume of 62 million barrels of shale oil reservoirs in the Bombay and Krishna Godarari provinces of India.
Earlier, in a prospectivity analysis of shale oil carried out of the Directorate General of Hydrocarbons of India in the North East states of Arunachal Pradesh and Assam, shale oil reserves are estimated to the tune of 137 billion tones with a recovery factor of 10-20 per cent.
Moreover, the former Chief of Oil India Limited has claimed that shale oil reserves in these states could produce 140 million tones per year for 100 years, making India net oil exporter. But developing these reserves has been logistically and technically quite challenging, primarily due to impact on the environment.
Interestingly, Ministry of Petroleum and Natural Gas, the government of India has come out with a document titled, “Hydrocarbon Vision 2030” for Northeast India. For this purpose a steering committee was constituted with participation of representatives from Oil and Natural Gas Corporation, Oil India Ltd, Directorate General of Hydrocarbons, GAIL India Ltd, Indian Oil Corporation Ltd, Numaligarh Refinery Ltd, Petroleum Planning & Analysis Cell, Oil Industry Development Board and Engineers India Ltd was constituted in May 2015.
The aim of this vision document is to prepare a roadmap to increase the production of oil and gas in the Northeast India in next 15 years, besides tapping the potential of both shale oil and gas.
Manish Vaid is a Junior Fellow with the Observer Research Foundation. Tridivesh Singh Maini is a New Delhi based policy Analyst associated with The Jindal School of International Affairs, Sonipat, India. The views in this article represent the views of the authors, not the institutions of which they are associated.