India and the US have signed an agreement for cooperation in the field of shale gas. The memorandum (MoU), signed in Mumbai on Saturday, will enable India to commence exploration for this and reduce its heavy dependence on imported energy sources.
“The MoU is on technical cooperation. It will help in mapping the area and interpretation of the data,” said Sudhir Bhargava, additional secretary in the petroleum ministry. US will train Indian personnel in the subject.
The MoU was signed by Bhargava on the Indian side and David Goldwyn, coordinator (international energy affairs) in the US Department of State, part of the delegation accompanying US President Barack Obama. The US Geological Survey will carry out studies on shale gas resources and will provide its report to India.
Shale gas refers to underground rock formations that hold reserves of oil and natural gas. It accounts for a fifth of US gas production.
In the private sector, Reliance Industries (RIL) has, over the past five months, made three shale gas acreage acquisitions in the US. In April, RIL bought a 40 per cent stake in Atlas Energy Inc’s Marcellus Shale acreage for $1.7 billion. In June, it agreed to buy a 45 per cent stake in Pioneer Natural Resources’ Eagle Ford shale natural gas asset in Texas for about $1.36 bn. This month, it acquired a 60 per cent stake in the Marcellus shale-gas acreages of Carrizo Oil and Gas Inc in the US for $392 million.
In August, Bharat PetroResources Ltd, the overseas upstream arm of state-run Bharat Petroleum Corporation Ltd, bought two exploration acreages of shale gas operated by Norwest Energy at Perth, Australia.
Within the country, the government is looking to launch the first-ever auction of shale gas areas in August 2011. This will be the second unconventional natural gas source in India after coal bed methane.