India to auction shale blocks by end-2011

New Delhi: India will auction the first of its shale gas blocks by the end of 2011 in a bid to tap unconventional fuel that will help reduce the country's energy shortfall. Senior government officials also indicated that the United States will help India prepare for its first shale-gas auction.

''Resource assessment, policy framework and legislative changes are in progress,'' said SK Srivastava, head of the Directorate General of Hydrocarbons, the nation's oil regulator. He was speaking at a conference in New Delhi today.

India signed a preliminary shale-gas accord with the US aimed at determining shale-gas reserves, oil minister Murli Deora said last year in November.

Shale is fine grained sedimentary rock containing organic material called kerogen which can produce oil and gas when distilled.

India is working with United States Geological Survey to help towards facilitating exploration of shale gas reserves, said Srivastava.

Preliminary estimates show India's shale-gas reserves may exceed its proven conventional gas deposits, according to PK Bhowmick, president of the country's Association of Petroleum Geologists.

''We are working with Schlumberger in a block in Raniganj. A drilling well was spudded last year and we expect some results shortly...(however), there are environmental issues, which needs to be dealt with,'' said PK Ghosh, executive director, offshore, ONGC.

India will need to change exploration laws to allow for the production of shale gas as current licenses don't include unconventional sources, S Sundareshan, the oil ministry's top bureaucrat said in October.