A Brief Note on Shale Gas

Background:

Conventionally, Oil & Gas are generated in source rock (generally shales and occasionally
limestones) and after migration gets trapped in Reservoir Rocks (generally sandstone &
limestone). Vertical & Horizontal wells are drilled to produce these oil & gas reserves.

Shale gas is a natural gas that could not migrate out of shale into reservoir and remains
entrapped within shale in pore space and fractures. These gases get produced from shale in
an unconventional way. Generally, Shales have insufficient permeability (in Nano Darcy i.e.
-9
10 D) to allow fluid flow to a well bore. Shale has low matrix permeability, so gas production
in commercial quantities requires fractures to provide permeability.
Schematic Geology of Shale Gas Resource

Shales, that host economic quantities of gas, are rich in organic material (0.5% to 2.5%) and
are usually mature petroleum source rocks falling in the thermogenic gas window.
Shale gas has become an increasingly important source of natural gas in the United States
over the past decade. In USA, shale gas production contributes to nearly 17% of the total gas
production in USA. Shale gas resources in different parts of the world are as shown below:

Shale gas has been produced for years from shales with natural fractures. The shale gas
boom in recent years has been due to modern technology in hydraulic fracturing in horizontal
wells.

Challenges & Issues related to Shale Gas:

Shale Gas is found in very low permeable shales and requires drilling of Horizontal wells and
completion through Hydraulic fracturing.

Hydraulic fracturing requires large amount of water. There may be environmental issues
related to water requirement and water disposal.
Shale Gas is a cost intensive venture and productivity of Shale gas well is generally low.
Recovery factor of Shale gas resource is also low and varying.
Shale Gas requires drilling of large number of wells compared to conventional development of
Oil/Gas Fields.
The Shale Gas exploration in India requires formulation of policy and amendment to P&NG
rules.

Status of Shale Gas in India:

Based on the data available from conventional oil/gas exploration in the country for the last so
many years, it appears that following sedimentary basins may be prospective from Shale gas
point of view:
o Cambay Basin
o Gondwana Basin
o Krishna-Godavari Basin
o Cauvery Basin
o Indo-Gangetic Basin
o Assam-Arakan Basin
However, detailed analysis of geo-scientific data gathered during conventional exploration of
Oil/Gas is being carried out to identify areas/basins prospective for shale gas.

Directorate General of Hydrocarbons (DGH) under Ministry of Petroleum & Natural Gas
(MoPNG) has initiated steps to:
o Identify prospective areas for Shale Gas exploration and acquisition of additional geoscientific data
o Formulation of Policy for Shale Gas exploration
o Launch First Shale Gas round by end 2011.
MoPNG, GoI has granted permission to Oil and Natural Gas Corporation Ltd. (ONGC) for an
R&D project in Gondwana Basin in the existing two CBM Blocks for exploration of Shale Gas.
ONGC plans to drill 4 Pilot wells to gather data relevant to Shale Gas. Drilling of the first well
has commenced.
A Multi Organizational Team (MOT) of DGH, ONGC, OIL, GAIL has been formed by MoPNG
to analyse the existing data set and suggest methodology for Shale Gas development in
India.
At the invitation from Department of State (DOS), an Indian technical delegation (DGH,
ONGC, GAIL) attended the Global Shale Gas Initiative (GSGI) conference at Washington, DC
and visited to Shale Gas site on August 23-25, 2010.
A draft MoU between Department of State, USA and {through DGH) has been signed on
October 6, 2010 for the following:
o Assessment of Shale Gas Resources in India
o Imparting training to Indian nationals
o Assistance in regulatory frameworks
A Technical Workshop is being planned on January 5-7, 2010 for training on Resource
assessment by USGS team at Delhi.

Way Forward:

After Resource assessment & identification of prospective areas in the Indian sedimentary
basins, blocks will be carved out for offer after Mid 2011.
Shale Gas policy is to be formulated and necessary amendments have to be incorporated in
the P&NG Rules in Mid 2011.
Possible environmental issues to be deliberated with Ministry of Environment.