India Shale Policy May Take Three More Months

India’s shale gas policy may take at least another three months, two oil ministry sources told Reuters on Wednesday.

The cabinet will soon approve a policy for shale gas exploration, initially allowing state oil companies holding India's oldest contracts to drill for shale, Reuters said.

It is reported that initial permission would be limited to national oil companies (NOCs) only on onshore blocks held by them under nomination.

Of the 356 blocks the two companies hold, India's upstream regulator has said 176 of them possibly hold shale resources, the news agency reported.

These contracts were awarded when India first started a push to find and produce oil and gas after it got independence from Britain in 1947. The old contracts refer to activity related to exploration and output of petroleum, which India's government has interpreted as a broad enough term to cover unconventional energy such as shale, Reuters said.

Reuters added that wording of new contracts for blocks awarded to private companies specifies activity related to natural gas and oil. The Indian government has interpreted this as excluding unconventional energy.

It is unclear how the government would resolve the issue. It is also unclear if the government would open existing blocks to bidding from companies who want to drill for shale, Reuters said.