India's Shale Policy in Two Weeks

India’s cabinet is likely to discuss the shale gas policy, which favours market-determined pricing of the fuel, in the next two weeks, The Calcutta Telegraph has reported.

"Final touches are being given to the policy and will be placed before the cabinet in the next two weeks," a senior oil ministry official said.

The schedule for shale gas bidding includes finalisation of the policy this fiscal, identification of the gas blocks for auction, roadshows and the first round of auction before the end of the calendar year.

The government has identified six basins ' Cambay, Assam-Arakan, Gondawana, KG onshore, Cauvery onshore and the Indo-Gangatic basins ' for carving out blocks to tap the unconventional fuel.

The draft policy favours market-determined pricing of shale gas, the newspaper report said. The policy will mention the terms of exploration and production to highlight the risks involved.

The draft policy does not permit cost recovery and profit sharing ' the two features that came under the criticism of the Comptroller and Auditor General of India during its audit of Reliance Industries' KG-D6 block.

Bidders will be asked to quote a percentage of output they are willing to share with the government at different production slabs.

"This will minimise the government's intervention and remove complications in accounting and incentives for gold plating, which may occur while allowing profit sharing, based on cost recovery… The government's share of production will be net of all statutory dues," the draft policy of the Directorate General of Hydrocarbons said.