Introduction :- 

Recently, Union Cabinet approved the policy to permit exploration and exploitation of unconventional hydrocarbons such as Shale oil/ gas, Coal Bed Methane (CBM), etc. under the existing Production Sharing Contracts (PSCs), CBM contract and Nomination fields.

The Hydrocarbons Vision-2025, presented in the year 2000, laid down the framework which would guide the policies relating to the hydrocarbons sector for the next 25 years. It includes:

• To assure energy security by achieving self-reliance through increased indigenous production and investment in equity oil abroad.
• To enhance quality of life by progressively improving product standards to ensure a cleaner and greener India.
• To develop hydrocarbon sector as a globally competitive industry which could be benchmarked against the best in the world through technology upgradation and capacity building in all facets of the industry.
• To have a free market and promote healthy competition among players and improve the customer service.
• To ensure oil security for the country keeping in view strategic and defence considerations

Existing contractual regime of PSCs (pre Hydrocarbon Exploration and Licensing Policy or HELP) did not allow contractors to explore and exploit CBM or other unconventional Hydrocarbons in already allotted/ licensed/ leased areas while CBM contractors were not allowed to exploit any other hydrocarbon except CBM.

Acreages held at present by various contractors in PSCs (72,027 Sq Km) and CBM blocks (5269 Sq Km) and National Oil Companies (NOCs) in nomination regime constitute a significant part of India’s sedimentary basin.

India currently has around 100 – 200 Trillion Cubic Feet (TCF) of shale gas reserves in five sedimentary basins and there is a strong possibility of shale reserves in basins such as Cambay, Krishna- Godavari (KG), Cauvery, etc where mature organic rich shale exist. CBM reserves are found in Coal bearing areas in 12 states including Andhra Pradesh, Chhattisgarh, Gujarat, Jharkhand, Madhya Pradesh, Maharashtra, Assam, Odisha, Rajasthan, Tamil Nadu, Telangana and West Bengal.

Benefits of the move :- 

• It will encourage the existing contractors in the licensed/ leased area to realize the full potential of Contract Areas and unlock the prospective unconventional hydrocarbons in their existing acreages.
• New investment in Exploration and Production (E&P) activities: it will increase the chances of finding and producing new hydrocarbon which will help to meet energy needs of the economy and hence moving towards energy security as envisaged in Hydrocarbons Vision 2025 (box).
•  Exploration and exploitation of additional Hydrocarbon resources will give new impetus to economic activities, additional employment generation and will benefit various sections of society.
• It will lead to induction of new, innovative and cutting edge technology and forging new technological collaborations to exploit unconventional hydrocarbons.
• There will be a complete shift from ‘One Hydrocarbon Resource Type’ to ‘Uniform Licensing Policy’ which is presently applicable in Hydrocarbon Exploration and Licensing Policy (HELP) and Discovered Small Field (DSF) Policy.

Other steps taken towards enhancing the production of unconventional hydrocarbons:

• Oil ministry recently included shale under the definition of petroleum: Earlier, under the Petroleum and Natural Gas Rules, 1959, Petroleum included naturally occurring hydrocarbons, whether in the form of natural gas or in a liquid, viscous or solid form, or a mixture of these, but did not include coal, lignite, and helium occurring in association with petroleum or coal or shale.
• Hydrocarbon Exploration and Licensing Policy (HELP) was introduced in 2016 which has the four main facets: uniform license for exploration and production of all forms of hydrocarbon,  an open acreage policy, easy to administer revenue sharing model and  marketing and pricing freedom for the crude oil and natural gas produced.
• In 2015, the Cabinet had approved the Marginal Field Policy (MFP)/ DSF policy with the objective to bring marginal fields, that could not be monetized for years due to various reasons such as isolated locations, small size, prohibitive development costs, technological constraints, unfavourable fiscal regime, to the production at the earliest so as to augment the domestic production of oil and gas.
• Open Acreage Licensing Policy (OALP): Setting up of National Data Repository. OALP enables upstream companies to bid for any oil and gas block without waiting for the announcement of bidding. • Shift towards a gas based economy: The Government wants to make India a gas-based economy ‘by boosting domestic production and buying cheap LNG’. India has set a target to raise the share of gas in its primary energy mix to 15% by 2022. GoI has adopted a systematic approach to focus on all aspects of the gas sector: Development of gas sources either through domestic gas exploration & production (E&P) activities or through building up facilities to import natural gas in the form of LNG, Development of adequate gas pipeline infrastructure including nationwide gas grid and Secondary distribution network.  Development of gas consuming markets including fertilizer, power, transport and industries, etc.