Cabinet Approves Policy Framework for Exploration and Exploitation of Unconventional Hydrocarbons (Download PDF)

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Union Cabinet has approved policy to permit exploration & exploitation of unconventional hydrocarbons such as Shale oil/gas, Coal Bed Methane (CBM) etc. It will be carried out under existing Production Sharing Contracts (PSCs), CBM contracts & Nomination fields to encourage existing Contractors in licensed/leased area to unlock potential of unconventional hydrocarbons in existing acreages.

Image of Cabinet Approves Policy Framework

Image of Cabinet Approves Policy Framework

Image of Cabinet Approves Policy Framework

Significance of Policy Framework for Exploration and Exploitation of Unconventional Hydrocarbons:

  • W/approval of this policy, there will be complete shift from ‘One hydrocarbon Resource Type’ to ‘Uniform Licensing Policy’ which is presently applicable in Hydrocarbon Exploration & Licensing Policy (HELP) & Discovered Small Field (DSF) Policy.

Benefits of Policy Framework for Exploration and Exploitation of Unconventional Hydrocarbons:

  • This policy will enable realization of prospective hydrocarbon reserves in existing Contract Areas which otherwise would remain unexplored & unexploited.

  • W/this policy dispensation, new investment in Exploration & Production (E&P) activities & chances of finding new hydrocarbon discoveries & resultant increased domestic production thereof is expected.

  • Exploration & exploitation of additional hydrocarbon resources is expected to spur new investment, impetus to economic activities, additional employment generation & benefitting various sections of society.

  • This will lead to induction of new, innovative & cutting-edge technology & forging new technological collaboration to exploit unconventional hydrocarbons.

Need for New Framework on Exploration and Exploitation of Unconventional Hydrocarbons:

  • As per existing contractual regime of PSCs, existing Contractors are not allowed to explore & exploit CBM or other unconventional hydrocarbons in already allotted licensed/leased area.

  • CBM Contractors are not allowed to exploit any other hydrocarbon except CBM.

  • Acreages held at present by various Contractors in PSCs & CBM blocks & National Oil Companies (NOCs) in nomination regime constitute significant part of India’s sedimentary basin.

What is Coal Bed Methane?

  • Coal Bed Methane (CBM) is unconventional form of natural gas found in coal deposits or coal seams.

  • CBM is formed during process of coalification, transformation of plant material into coal.

  • It is considered valuable energy resource w/reserves & production having grown nearly every year since 1989.

  • Varied methods of recovery make CBM stable source of energy.

What is Shale Gas?

  • Shale gas is natural gas formed from being trapped w/i shale formations.

  • It is unconventional source of methane, like coal-bed gas (in coal seams) & tight gas (trapped in rock formations).

  • It is colourless, odourless gas, lighter than air.

  • It is cheaper than natural gas, releases 50 % less CO2, hence better source for generating electricity.

  • It provides feedstock for petrochemicals industry, which is turned into fertilizer, plastics & other useful stuff.

Hydrocarbon Exploration & Licensing Policy

  • Hydrocarbon Exploration & Licensing Policy (HELP) is indicating new contractual & fiscal model for award of hydrocarbon acreages towards exploration & production (E&P).

  • Objectives:

  • enhance domestic oil & gas production

  • bring substantial investment

  • generate sizable employment

  • enhance transparency

  • reduce administrative discretion

- Published/Last Modified on: October 9, 2018

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