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OIL India is for shale gas exploration  

Country’s second-largest state-owned explorer, Oil India Limited (OIL), will spend up to Rs 100 crore to evaluate the economic feasibility of shale gas exploitation in the country.

The exercise will be completed in the next 6-12 months. OIL has undertaken a two-phase strategy to decide whether exploration of this kind of natural gas found in shales is economically viable or not, said a senior OIL official.In the first phase, OIL management is reviewing all facets related to shale gas exploration. They are discussing the various scenarios with global consultants dealing in the sector. “OIL officials have met consultants from North America and Australia in the last few weeks,” the official said.After getting a fair idea on the technology needed for the process the company will switch to the second phase. It will drill one or two wells in Assam basin to determine the potential of shale gas exploration. “Drilling of each well will cost nearly Rs 60 crore,” he said.

At the end of the exercise, OIL will come to a conclusion whether shale can exploration is economically viable for the company or not. “We have already discovered the presence of shale gas in the vicinity of our assets. But, so far there is no estimate of hydrocarbon deposit and kind of technology required to monetise the asset,” the official said.OIL chairman N M Borah, while addressing an investors meet in Mumbai on July 2, divulge his company’s plan to exploit shale gas.Till now, India doesn’t have a policy that allows exploitation of shale gas. When asked, how will OIL go forward in absence of a legal mandate, the official said, “Oil regulator directorate general of hydrocarbons (DGH) has already started working towards formulating a policy on shale gas. We hope there will be clarity soon.” “By 2011, we should be able to allow shale gas exploration in at least three-four blocks, out of 26 sedimentary basins in the country,” director general of DGH, S K Srivastava told this newspaper.Financial Chronicle reported on August 6 that DGH will shortly invite international competitive bids to out a feasibility study on shale gas exploration in the country.

Oil India to spend Rs 100 crore to explore shale gas….Siddhartha P Saikia / Financial Chronicle

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