India proposes terms for shale oil, gas
The government of India has invited public comment on draft fiscal terms for development of oil and gas resources in shale (OGJ Online, Mar. 13, 2012).
The US Geological Survey has estimated India’s technically recoverable shale gas resource at 6.1 tcf in three of the country’s 26 basins and said oil potential in shale also exists.
The Ministry of Petroleum and Natural Gas envisions a contract different from the agreement in place for conventional resources. It already uses a special contract for coalbed methane.
Non-Indian operators would be able to bid for shale contracts.
Basic terms in the draft contract are ad valorem production-level payments, royalty, and license fees.
Contract duration would be 32 years in two phases: 7 years for exploration and 25 years for production if development proceeds.
Prospective contractors would bid on the basis of minimum work program, production-linked payments, technical ability, and net worth.