Pressure gauges sit on pipework at a shale gas collection and transfer facility at the Fuling shale gas project site. (Photographer: Qilai Shen/Bloomberg)

No Commercial Discovery Of Shale Gas Reserves In India Yet, Says Pradhan

No commercial discovery of shale gas reserves has been made in India so far, Petroleum and Natural Gas Minister Dharmendra Pradhan told the Lok Sabha today.

The government had announced policy guidelines for exploration and exploitation of shale gas and oil by national oil companies in October 2013. “In pursuance of this policy, under the first phase of assessment, Oil and Natural Gas Corporation Ltd. drilled 22 assessment wells in 18 blocks in four basins (Assam, Krishna-Godavari, Cauvery and Cambay basins) and Oil India Limited drilled three wells in three blocks in two basins (Assam and Rajasthan),” the minister said.

According to ONGC’s annual report for 2016-17, the oil explorer had identified 50 blocks under the first phase of shale gas exploration, which it later mulled shelving due to “limited success”, Mint reported.

The world’s third-biggest oil consumer is looking to cut crude imports by 10 percent by 2022 by enhancing domestic production and tapping alternative sources. India’s trade deficit — the gap between exports and imports — rose to a five-year high of $16.6 billion in June, according to government data, as oil prices jumped.

Also read: IMF Cuts India Growth Forecast A Touch On Higher Oil Prices

Shale gas, found trapped under sedimentary rock formations, is an important source of energy in the U.S. and Canada. The oil or gas from the reserves is extracted largely through fracking or injecting water, sand or chemicals at high pressure into rocks. The shale boom has transformed the U.S. from the world’s largest gas importer into a net exporter in a decade.

The oil cartel Organisation of Petroleum Exporting Countries forecast early this year that new oil supplies from its rivals, in particular the U.S. shale oil, will exceed growth in demand this year as the U.S. industry thrives.

Many challenges, however, prevent state-run and private companies from exploring shale gas reserves in India, according to K Ravichandran, senior vice president and group head of corporate sector ratings at ICRA Ltd. It’s a big challenge to acquire huge tracts of land needed for shale exploration, he said, adding it also requires a huge amount of water for pumping. Getting environmental approval is another challenge as most of the reserves are in eastern India, where the land is largely under agriculture or there’s a threat “Naxalite” threat.