New land acquisition bill may affect shale gas exploration: ONGC
Edited: News Courtesy: The Economic Times Sep 26, 2013
NEW DELHI: The new land acquisition law will obstruct shale gas operations in the country unless landowners have the incentive to participate, Oil and Natural Gas Corp’s (ONGC) director, exploration, NK Verma said on Wednesday.
The state-run company plans to spend up to Rs 200 crore to drill wells in the Cambay basin next month to explore shale oil and gas, responding quickly to the Cabinet’s decision on Tuesday to allow state explorers to find shale resources in blocks held by them.
“The new legislation, which is good for the landowners, may create problems because shale exploration requires large piece of land. But, the problem can be resolved if we make landowners as stakeholders,” he said after the company’s AGM.
In the US, landowners have rights over sub-surface resources , Verma said. “We have decided to invest Rs 150-200 crore in drilling four wells (in the Cambay block) to find shale resources and based on the results, we will intensify efforts in finding shale oil and gas other blocks,” he said. Global oil major and shale exploration expert ConocoPhillips is providing crucial conceptual guidance to ONGC BSE -0.95 % in its new venture , he said.
The Cabinet on Tuesday approved a shale oil and gas exploration policy, which allows only state-run ONGC and Oil India BSE -3.88 % to hunt for non-conventional resources in blocks awarded to them without auction.
The policy prevents participation of successful private explorers such as Reliance Industries BSE -1.20 %, GSPC and Cairn BSE -0.17 % India from finding shale resources in their blocks. “ONGC expects positive results from shale exploration and depending on the outcome and experience we will intensify our efforts ,” chairman & managing director Sudhir Vasudeva said.
Vasudeva said company would continue its strategy to acquire oil and gas assets abroad and plans to raise oversea loans to fund acquisitions because the rupee has been devalued significantly . “We plan to raise $4 billion in debt for the two acquisitions in Mozambique,” Vasudeva said.
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