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India delays launch of shale gas policy to 2012

India delays launch of shale gas policy to 2012

October 20, 2011 / 10:30 AM IST

NEW DELHI (Reuters) - India has pushed back plans to unveil its shale gas exploration policy to next year, the oil minister said on Wednesday, lagging China which has set ambitious targets to unlock potentially huge unconventional gas resources trapped in its rocks.

Despite policy hurdles, China is expected to pump 6.5 billion cubic metres of shale gas in 2015 to cut dependence on polluting coal and imported gas.

India, the world's fourth-biggest oil importer, buys nearly 80 percent of its needs as expanding refining capacities have outpaced growth in local oil output.

"Prospects of shale gas are there...We are exchanging notes with international experts on this. Our ambition was to unveil it this year but I'm sure we'll be able to do that next year," Oil minister S. Jaipal Reddy told a news conference.

"There are certain concerns," the minister said, without elaborating further.


An official at upstream regulator Directorate General of Hydrocarbons said there were a number of issues that are delaying the policy formation.

"Not one, there are many issues. (The) environment ministry has concerns over using hydraulic fracturing ...also land acquisition is not easy in India. Shale gas requires huge land," said the official, who did not wish to be identified.

Hydraulic fracturing involves injecting water, sand and chemicals into shale rock formations at high pressure to force out oil and natural gas, which can potentially contaminate underground water reservoirs.

Earlier this month, the French government said it would cancel three shale gas exploration permits including one held by oil giant Total SA over environmental concerns.

A lack of a policy framework and resource estimates have led to Indian companies turning their focus to shale gas assets overseas.

State-run GAIL recently agreed to buy a 20 percent stake in shale gas assets in the United States.

Reliance Industries last year acquired stakes in three shale gas assets in the United States.

(Reporting by Nidhi Verma; editing by Jason Neely)

Tags: #Wire News
first published: Oct 19, 2011 10:45 pm

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