India plans to sign an accord with the U.S. on shale gas technology when President Barack Obama visits in November as the south Asian nation prepares to offer exploration areas for the first time next year.
“We are hopeful that we will get into collaboration,” S. Sundareshan, India’s oil secretary, said in an interview in New York yesterday. “The policy framework for shale gas is being formulated and the first round of auction will be before the end of 2011.”
India intends to join a boom in shale-gas exploration that has fueled more than $39 billion of acquisitions in the U.S. by companies including Exxon Mobil Corp., Royal Dutch Shell Plc and Reliance Industries Ltd. The nation faces an energy shortfall of 55 percent by 2030 as demand more than doubles to the equivalent of 1.3 billion metric tons of oil, according to the Paris-based International Energy Agency.
India will need to change exploration laws to allow for the production of shale gas as current exploration licenses don’t include such so-called unconventional sources, Sundareshan said.
Reliance Industries, India’s largest company by market Value, has agreed to pay almost $3.4 billion for stakes in U.S. shale-gas fields since April, taking on partnerships in Pennsylvania and Texas, where U.S. producers first learned to extract gas commercially from hard, impermeable shale.
Preliminary estimates show India’s shale-gas reserves may be larger than its proven conventional gas deposits, P.K. Bhowmick, president of the country’s Association of Petroleum Geologists, said in June.