Oil India gears up for overseas shale assets acquisition
Aug-31-2010
State owned oil major, Oil India Ltd (OIL), is in talks with several US shale gas companies to jointly acquire shale gas properties in the US and Australia worth Rs1 billion in 2010.
N M Borah, chairman of OIL told PTI that the company is currently talking with some US-based shale gas companies to form a JV to acquire shale gas assets globally since US shale gas companies have the expertise and the technology for the extraction of shale gas.
Oil India, which has earmarked a budget of Rs1 billion for potential shale asset acquisitions in 2010, is reported to have hired seven investment banks including Citigroup, Morgan Stanley, Bank of America Merrill Lynch and Deutsche Bank to identify and advise on potential shale gas assets that could be acquired in the US and Australia.
The public sector exploration company may even team up with two other state run energy firms, GAIL India and oil marketing company Indian Oil for joint acquisitions of shale gas properties overseas, according to T K Ananth Kumar, Oil India director of finance.
Oil India also plans to invest around Rs300-Rs500 crore in shale gas exploration over the next three to four years, said Borah.
Meanwhile, Washington has offered India its expertise in exploring and exploiting shale gas resources - a move that is aimed at helping India reduce its dependence on oil and gas imports. (See: US offers India technology to exploit shale gas)
Briefing media representatives last week at the Global Shale Gas Initiative Conference in Washington, David Goldwyn, the Obama administration's coordinator for International Energy Affairs, had said, ''Coincident with prime minister Singh's visit to the US, we launched a memorandum of understanding with India on shale gas. And we have proposed... that the US Geological Survey (USGS) do a resource assessment of certain shale basins in India.''
Goldwyn said that the USGS would also train Indian geophysicists to enable them to professionally assess shale resources.
Shale gas (gas locked in sedimentary rocks) has become an important source of energy in a few countries which have been able to commercially exploit this resource.
India has so far only explored on-land and offshore oil and gas blocks and preliminary estimates show India's shale-gas reserves may be larger than its proven conventional gas deposits, according to P K Bhowmick, president of the Association of Petroleum Geologists
Several basins in India are known to hold shale gas resources, particularly in three basins - Cambay (in Gujarat), Assam-Arakan (in the North-East) and Gondwana (in central India.
India plans to join the booming shale-gas exploration business that has fuelled more than $39 billion of acquisitions in the US by companies, including Exxon Mobil, Royal Shell and Reliance Industries Ltd.
India also plans to change exploration laws for shale gas in the country because current exploration licences do not include unconventional sources and need to work out how companies that produce shale gas will share profit with the government, when India puts oil and gas block for auctions under NELP.
India, Asia's third-biggest energy consumer, faces an energy shortfall of 55 per cent 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.
N M Borah, chairman of OIL told PTI that the company is currently talking with some US-based shale gas companies to form a JV to acquire shale gas assets globally since US shale gas companies have the expertise and the technology for the extraction of shale gas.
Oil India, which has earmarked a budget of Rs1 billion for potential shale asset acquisitions in 2010, is reported to have hired seven investment banks including Citigroup, Morgan Stanley, Bank of America Merrill Lynch and Deutsche Bank to identify and advise on potential shale gas assets that could be acquired in the US and Australia.
The public sector exploration company may even team up with two other state run energy firms, GAIL India and oil marketing company Indian Oil for joint acquisitions of shale gas properties overseas, according to T K Ananth Kumar, Oil India director of finance.
Oil India also plans to invest around Rs300-Rs500 crore in shale gas exploration over the next three to four years, said Borah.
Meanwhile, Washington has offered India its expertise in exploring and exploiting shale gas resources - a move that is aimed at helping India reduce its dependence on oil and gas imports. (See: US offers India technology to exploit shale gas)
Briefing media representatives last week at the Global Shale Gas Initiative Conference in Washington, David Goldwyn, the Obama administration's coordinator for International Energy Affairs, had said, ''Coincident with prime minister Singh's visit to the US, we launched a memorandum of understanding with India on shale gas. And we have proposed... that the US Geological Survey (USGS) do a resource assessment of certain shale basins in India.''
Goldwyn said that the USGS would also train Indian geophysicists to enable them to professionally assess shale resources.
Shale gas (gas locked in sedimentary rocks) has become an important source of energy in a few countries which have been able to commercially exploit this resource.
India has so far only explored on-land and offshore oil and gas blocks and preliminary estimates show India's shale-gas reserves may be larger than its proven conventional gas deposits, according to P K Bhowmick, president of the Association of Petroleum Geologists
Several basins in India are known to hold shale gas resources, particularly in three basins - Cambay (in Gujarat), Assam-Arakan (in the North-East) and Gondwana (in central India.
India plans to join the booming shale-gas exploration business that has fuelled more than $39 billion of acquisitions in the US by companies, including Exxon Mobil, Royal Shell and Reliance Industries Ltd.
India also plans to change exploration laws for shale gas in the country because current exploration licences do not include unconventional sources and need to work out how companies that produce shale gas will share profit with the government, when India puts oil and gas block for auctions under NELP.
India, Asia's third-biggest energy consumer, faces an energy shortfall of 55 per cent 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.
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