The company is getting technological support for the venture from ConocoPhillips

Oil and Natural Gas Corporation (ONGC), on Friday, announced that it had drawn up plans to start commercial production of shale gas next year.

Addressing reporters on the sidelines of the ‘Oil and Gas Summit’ organised by Indian Chamber of Commerce (ICC), ONGC Chairman and Managing Director Sudhir Vasudeva said the Cabinet Committee on Economic Affairs (CCEA) had allowed ONGC and Oil India Ltd (OIL) to tap shale resources in blocks allotted to them on a nomination basis. “We are planning to drill 10 wells this year and hope to start commercial production next year,” he added.

ONGC plans to start drilling for the unconventional shale hydrocarbon resource in Gujarat sometime this month. The company is getting technological support for the venture from ConocoPhillips.

Cambay in Gujarat is one of the basins that has been identified as potentially bearing shale resources. Shale extraction uses hydraulic fracturing, which involves blasting water, sand and chemicals underground to release trapped oil and gas.

In the first phase, ONGC and OIL have been permitted to explore for and produce shale oil and gas from onland blocks that were allotted on a nomination basis before advent of the New Exploration Licensing Policy in 1999. The government will offer shale oil and gas blocks to other companies through an auction planned after such a policy is taken to the Cabinet for approval in the next few weeks.

Shale gas, or natural gas trapped in sedimentary rocks (shale formations) below the earth's surface, is the new focus area in the U.S., Canada and China as an alternative to conventional oil and gas. As per available data, six basins—Cambay (in Gujarat), Assam-Arakan (in the North-East), Gondawana (in central India), KG onshore (in Andhra Pradesh), Cauvery onshore and Indo-Gangetic basins, hold shale gas potential. Various studies have estimated recoverable reserves of shale gas at between 6 trillion cubic feet and 63 trillion cubic feet.

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