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ConocoPhillips, India's ONGC Sign Shale, Offshore Agreement

India's state-owned Oil and Natural Gas Corp. Ltd. (ONGC) announced Friday that it has signed a memorandum of understanding (MOU) with ConocoPhillips to explore and develop shale and deepwater resources in India and North America.

According to media reports, the MOU calls for ConocoPhillips to evaluate 19 leasing blocks in ONGC's portfolio off the eastern coast of India over the next six months. The companies will also cooperate in shale gas exploration through joint studies of basins in North America and in India's Damodar, Cauvery and Krishna-Godavari (KG) basins.

"At a time when the world is witnessing nearly static reserve growth from conventional resources, the unprecedented growth of shale gas in the U.S. has generated new hopes for all the energy deficient countries with shale resources [to be able to supplement their] conventional fuels," ONGC said. "ConocoPhillips has extensive experience in the field of shale gas exploration and exploitation in the U.S. and holds [a] large acreage position, while ONGC's endeavor in shale gas is at a nascent stage."

ONGC first produced natural gas from unconventional resources on Jan. 25, 2011. A test well, the RNSG-1, was drilled to a depth of around 1,700 meters into the Barren Measure Shale at a location near Durgapur in West Bengal state.

India's Ministry of Petroleum & Natural Gas announced on March 13 that it would unveil new regulations for shale gas development by the end of March (see Shale Daily, March 15).

The United States, through the U.S. Geological Survey (USGS), and India signed another MOU on shale gas development in November 2010, when President Obama visited the country (see Shale Daily, Jan. 12, 2011). That MOU called for conducting an assessment of India's shale resources, sharing best regulatory practices and promoting sustainable domestic and foreign investment in shale development.

Schlumberger Ltd. completed India's first shale gas well in January 2011. At the time, a company official told business news media in India that the country's shale deposits hold more than 600 Tcf. Meanwhile a study commissioned by the U.S. Energy Information Administration (EIA) said India has 63 Tcf of technically recoverable shale gas resources, ranking it 15th in the world (see Shale Daily, April 7, 2011).

According to the EIA, India produced about 1.85 Tcf of natural gas during 2010, a 63% increase from 2008, earning the rank of 21st in the world in terms of production. But the country had to import 429 Bcf that year to meet demand of about 2.28 Tcf.

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