Draft shale policy: Navigating uncertainties

By Akshay Jaitly and Pia Singh, Trilegal
0
1639
LinkedIn
Facebook
Twitter
Whatsapp
Telegram
Copy link

The much awaited Draft Policy for Exploration and Exploitation of Shale Oil and Gas in India (draft shale policy) was published recently by India’s Ministry of Petroleum and Natural Gas for stakeholder comments. Press reports indicate that the first auction of shale gas blocks is expected by December 2013. This article briefly analyses the draft shale policy and sets out some key issues for potential investors in the shale gas sector.

Akshay Jaitly Partner Trilegal
Akshay Jaitly
Partner
Trilegal

Background

Historically, petroleum and natural gas were produced from oilfields operated by public-sector oil companies such as Oil and Natural Gas Corporation and Oil India Limited. These companies were granted petroleum exploration licences through nomination. In the mid-1990s, the monopoly ended and independent production-sharing contracts were negotiated for certain blocks between the government of India, public-sector oil companies (previously granted petroleum exploration licences) and private oil companies (as holders of participating interests).

What is proposed?

Under the draft shale policy, investments in the shale gas sector are proposed to be structured through a framework similar to the one currently in use in the oil and gas and coal bed methane (CBM) sectors. The concept of production-linked payments, one of the proposed bidding parameters under the draft shale policy, is an improvisation on the profit-sharing model used for oil and gas projects. Production-linked payments will be determined as a percentage of revenue receipts from shale gas or shale oil sold from the contract area, net of royalty on a monthly basis.

You must be a subscribersubscribersubscribersubscriber to read this content, please subscribesubscribesubscribesubscribe today.

For group subscribers, please click here to access.
Interested in group subscription? Please contact us.

你需要登录去解锁本文内容。欢迎注册账号。如果想阅读月刊所有文章,欢迎成为我们的订阅会员成为我们的订阅会员

已有集团订阅,可点击此处继续浏览。
如对集团订阅感兴趣,请联络我们

Akshay Jaitly is a partner in the Delhi office of Trilegal, where Pia Singh is a senior associate.

Trilegal_logo

New Delhi

A-38, Kailash Colony

New Delhi – 110 048

India

Tel: +91 11 4163 9393

Fax +91 11 4163 9292

E-mail: delhioffice@trilegal.com

Mumbai

One Indiabulls Centre,

14th floor, Tower One,

Elphinstone Road,

Mumbai – 400 013

Tel: +91 22 40791000

Fax: +91 22 40791098

Email: mumbaioffice@trilegal.com

LinkedIn
Facebook
Twitter
Whatsapp
Telegram
Copy link