India's Oil Ministry to Move Note for Shale Gas Policy

India’s Petroleum Ministry will shortly move a cabinet note for the country’s first shale gas policy that may be finalized later this fiscal. Business Standard has reported that ministry has got comments from industry on a draft policy that it had circulated earlier this year.

A ministry official told the newspaper that the policy could be finalized as early as December-January. “We need to coordinate with the environment ministry on issues related to water and land in shale gas exploration. We will then circulate a cabinet note”, he said.

The key features in draft policy related to cost-recovery etc are being retained in the cabinet note. The draft had proposed a royalty and production-linked payment for auction of shale gas acreage. Cost recovery in blocks offered under the New Exploration Licensing Policy (Nelp) has been the centre of dispute between the government and Reliance Industries Ltd (RIL). The draft policy suggested a fiscal regime similar to the regime adopted for coal bed methane (CBM) operations where cost-recovery is now allowed.