Oil Minister M Veerappa Moily informed media persons that his ministry was in the process of putting out a note on the draft shale gas policy for the consideration of the cabinet.
He hopes that his ministry would announce the shale gas policy in a months time. The policy would enable the exploitation of unconventional hydrocarbon resource to meet its growing energy needs.
The minister said his ministry received comments on the policy it had floated some time ago. The government is planning to launch its first auction of shale gas block by 2013-end on terms that are likely to be remarkably different from those offered in bid rounds for oil and gas blocks.
Trapped in sedimentary rocks (shale formations) below the earth's surface, shale gas or natural ga is the new focus area in the US, Canada and China as an alternative to conventional oil and gas for meeting growing energy needs.
According to the available data, six basins -- Cambay (in Gujarat), Assam-Arakan (in the North-East), Gondawana (in central India), KG onshore (in Andhra Pradesh), Cauvery onshore and Indo Gangatic basins, hold shale gas potential.
Shale gas areas can be offered for exploration on royalty and production-linked payments basis, the Directorate General of Hydrocarbons (DGH), the Oil Ministry's technical arm has recommended.
According to the policy, bidders would be asked to quote a percentage of output they are willing to share with the government at different production slabs.