ONGC gives up shale gas hunt midway the first exploration

A disheartening news comes the petroleum sector: India’s largest petroleum explorer, Oil and Natural Gas Corporation (ONGC), has aborted shale gas exploration programme before completing even the first phase of the programme search. The state-run company has concluded that the country “may not have sufficient commercially-extractable shale reserves”.

The explorer’s assessment runs counter to various national and international agencies’ estimate of India’s shale oil and gas resources. The US Energy Information Agency (EIA) in a 2015 report had estimated India’s “technically recoverable” shale gas reserve of 96 trillion cubic feet in Cambay, Krishna – Godavari, Cauvery, Damodar Valley, Upper Assam, Pranahita – Godavari, Rajasthan and Vindhya basins. In 2013, the ONGC itself had identified 187.5 TCF of reserves in five basins of Cambay onland, Ganga Valley, Assam & Assam-Arakan , Krishna Godavari onland & Cauvery onland.

The abandoning of the exploration by the ONGC has come as a big setback to India’s multi-pronged efforts to develop domestic oil and gas resources to combat the acute shortage and cut costly imports.

The US’ Energy Information Agency (EIA) has estimated the world’s shale gas reserves at around 7576 TCF. Shale gas is found in unconventional reservoirs typically trapped in shale rocks of low permeability, originally deposited as clay and silt, at about 2000 to 5000 meters below the earth’s surface. In contrast, conventional natural gas, which is trapped in sandstone rocks, having high permeability and can be easily produced by traditional vertical drilling, found at around 1500 meters. The technique used for shale gas production requires first drilling a vertical well to the targeted rock followed by horizontal drilling. This makes it more difficult and more expensive to extract because of high upfront costs.
Looking at the reserves of shale gas, the EIA has listed eleven countries where technically recoverable shale gas reserves are found. They are Argentina, Algeria, Australia, Brazil, Canada, China, India, Mexico, Russia, South Africa and US. Out of these, the US, Canada and China have shown capabilities in shale gas production.

In 2013, the Ministry of Petroleum and Natural Gas allowed ONGC and Oil India (OIL) to explore for shale oil and gas in 180 nomination blocks in three phases of three years each. ONGC was tasked to carry out explorations in 175 blocks, including 50 blocks in the first phase, and Oil India in five blocks in each phase. The Oil and Natural Gas Corporation started drilling its first exploratory shale gas well in Jambusar near Vadodara, Gujarat, in Cambay basin in 2013. It was estimated that around 20 TCF shale gas was recoverable from that basin.

But the corporation ended the programme in the very first phase after drilling 26 wells in three hydrocarbon basins of Cambay, KG and Assam-Arakan in Gujarat, Andhra Pradesh and Assam- after spending Rs 600-700 crore and over five years.