Shale Gas potential of Indian

Basins
And
Policy imperatives to explore and
Develop
Dr. V K Rao

Iindia infrastrucure Nov2014

Concept Transformation
In pursuit of conventional
Oil and Gas exploration
over the years,
Geologists regarded
Shales as:
Source Rocks by virtue
of the richness of
organic material content,
its thermal maturity,
hydrocarbon generation
potential and geographic
spread over large areas
Cap Rocks by virtue of
their impermeable
nature and compactness
thus acting as good seal

Methane in Shales is generated from

the transformation of Organic
material by bacterial (biogenic) and
geo chemical (thermogenic)
processes
The gas so generated gets stored by
multiple mechanisms as free gas in
micropores and as sorbed gas on the
internal surfaces of organic matter
Thus Shale Gas is a combination of
sorbed gas and micropore gas
The challenge in these accumulations
is to delineate mature organic rich
layers within Shale sequences and
then to exploit it commercially
Thus it is more of technological
challenge which has been met by
innovative multistage hydraulic
fracturing and multilateral horizontal
drilling techniques developed,
tested and perfected by USA

Concept Transformation
In pursuit of conventional
Oil and Gas exploration
over the years,
Geologists regarded
Shales as:
Source Rocks by virtue
of the richness of
organic material content,
its thermal maturity,
hydrocarbon generation
potential and geographic
spread over large areas
Cap Rocks by virtue of
their impermeable
nature and compactness
thus acting as good seal

Methane in Shales is generated from

the transformation of Organic
material by bacterial (biogenic) and
geo chemical (thermogenic)
processes
The gas so generated gets stored by
multiple mechanisms as free gas in
micropores and as sorbed gas on the
internal surfaces of organic matter
Thus Shale Gas is a combination of
sorbed gas and micropore gas
The challenge in these accumulations
is to delineate mature organic rich
layers within Shale sequences and
then to exploit it commercially
Thus it is more of technological
challenge which has been met by
innovative multistage hydraulic
fracturing and multilateral horizontal
drilling techniques developed,
tested and perfected by USA

World Shale Gas Potential (Tcf)

6000

5661

5000

4000

4569
3962

3856

3000

GIP
Recov.

2587

2000

1404
1225

1069

1000

1381

1042
624
396

0
N. America

S. America

Total: 22,016 Tcf GIP

Europe

Africa

Asia

Australia

Rogner,HH Modified

Recoverable: 5760 Tcf

Middle East, ,Former Soviet Union &Asia Pacific are excluded

Recoverable Shale Gas Resources (Tcf) based on EIA Study

(48 Basins in 32 countries)

Only 4 basins
Now revised to
120Tcf

Russia, Central Asia, Middle East, SE Asia,Central Africa not included

(CBM & SHALE GAS

Journey)

NOCs to explore Shale

Gas
in their Nominated
blocks

Demand and Import Projections ( MMSCMD)

Potential Shale Gas Basins

1. Cambay Basin
2. Gondwana Basin
3. Assam-Arakan Basin
4. Krishna-Godavari Basin
5. Cauvery Basin
6. Vindhyan Basin
7. Bengal Basin
8. Rajasthan Basin
9. Ganga Basin

Typical Shale Gas Exploration and Development

Phases
2 to 5
Years

2 to 5 Years

Acreage
Acreage

Evaluation&&
Evaluation
Delineation
delineation

Pilot drilling
&Exploration

10 to 15 Years
Appraisal

Data
assimilation ,
analysis &
study
Delineate
Focus areas
Land
acquisition

Drill
parametric
wells
Pilot
testing
Evaluate
Resource
potential &
extent of
play

Initial
Developmen
t
Drill
appraisal
horizontal
wells
Hydrofrac
and test
viability
Optimise
well design
and testing
parameters

Drill Initial
dev. Wells
Delineate
Developmen
t area
Optimise
well
spacing ,well
design etc

Finall
development &
Commercial
Prodn:

Bring in Rigs and

frac to develop
Start commercial
production
Continue
development

Unique challenges
Low permeability-nanno darcy
Heterogenous and anisotropic
Clay mineralogy complexities
Delineation of organically rich
layers within thick stratigraphic
columns
Resource Assessment is
different and difficult
- Does not follow rules of field
size distribution
- Essentially technology driven
combined with expert
Geologic judgements
Gas production is relatively low
BUT sustain for longer periods

Salient Parameters for Shale Gas

Assessment
Identification
of sweet spots
& thickness

Organic
Richness &
typing

Maturation
Fracturaion
components

Shale Gas
assessme
nt

Gas in Place

Pore
Pressure

Brittleness

Micro
porosity &
Permeability

Mineralogy &
Petrofacies

Cambay Shale Resource Play(Isopach)

Cambay Shale Resource Play(TOC)

Cambay Shale Resource Play(Vro)

Source:DGH

GIP Estimated: 20 Tcf

Source: ONGC

Shale Characteristics of Cambay Basin

Formation

Thickness(m)

TOC(%)

VRo(%)

Gas Conc.
Bcf/mi2

Kerogen Type

Older
Cambay Shale

500-1200

1.5-4.0

0.75-1.20

231 *

II & III

Younger
Cambay Shale

520-1500

1.00-4.00

0.75-0.85

231 *

II & III

Discovered oil & Gas Fields and Proven Source Rock Potential
Basinal Area
(Sq Kms)

No. of Oil & Gas

fields

Inplace HC
Volumes(MMT)
O+OEG

Source Rock
Sequences

Depth Range
(m)

Prognosticated
Resource
Potential (TCF)

51000

>110

2050

Cambay
Shales

1500-2500

217

Olpad shales
* Source: US EIA Report

Krishna-Godavari Basin

Pericratonic rift
basin located on
east coast of
India extending
onland and
offshore

Main Tectonic
elements are:
Bapatla Horst
West Godavari
Sub basin
Tanuku Horst
East Godavari
Sub basin
Eocene Shelf
Edge

Shales in Stratigraphy-Krishna-Godavari Basin

3
2

Geological Section across Krishna-Godavari Basin

Source:DGH

Raghavapuram Shale Resource Play

Kommugudem Shale Resource Play

Shale Characteristics of Krishna-Godavari Basin

Formation

Thickness(m)

TOC(%)

VRo(%)

Gas Conc.
Bcf/mi2

Kerogen Type

Raghavapuram

200->1800

1.50-4.20

0.90-1.30

143 *

II & III

Kommugudem

300-900

1.41-5.30

1.00-1.30

156 *

II & III

Discovered Oil & Gas Fields and Proven Source Rock Potential
Basinal
Area(sq.km)

No. of Oil & Gas

fields

Inplace HC
volumes (MMT)
O+OEG

28,000

>50

120

* Source: US EIA Report

Source Rock
Sequences

Raghavapuram
Shales
Kommugudem
Shales

Depth
Range(m)

Prognosticated
Resource
Potential
(TCF)

1500-2000

280

Cauvery Basin
Intracratonic rift basin located
between two cratonic masses viz:
Indian peninsula and Sri Lankan
Massif
Main Tectonic elements are:

Ariyalur-Pondicherry sub
basin
Kumbhkonam-Madnam-Portonovo
High
Tanjore-Tranquebar sub basin
Pattukottai-Mannargudi-Karaikal
High
Nagapattinam sub basin
Vedarniyam High
Pattukuttai-Manargudi high
Ramnad-Palk Bay sub basin
Mandapam Ridge
Gulf of Mannar sub basin
Vedarniyam Tiruchirapally terrace

Shales in Stratigraphy

Sattapadi Shales in

Uttatur Group
Kudavasal shales &
Portnovo Shales in
Ariyalur Group
Komarakshi Shales
in Ariyalur Group
Karaikal Shales in
Nagore Group

Shales in Stratigraphy

Sattapadi Shales in

Uttatur Group
Kudavasal shales &
Portnovo Shales in
Ariyalur Group
Karaikal Shales in
Nagore Group

Cretaceous Shales Resource Play(Vro )

SOURCE ROCK MATURITY DISTRIBUTION MAP

Sattapadi Shale Resource Play

Geological Section across Cauvery basin

Source:DGH

Shale Characteristics of Cauvery Basin

Formation

Thickness(m)

TOC(%)

VRo(%)

Gas Conc.
Bcf/mi2

Kerogen Type

Karaikal

250-750

0.31-2.78

1.15-1.20

143 *

II & III

Sattapadi

300-500

1.50-4.76

0.65-1.15

No Data

II & III

Discovered Oil & Gas Fields and Proven Source Rock Potential
Basinal
Area(sq.km)

No. of Oil & Gas

fields

Inplace HC
volumes (MMT)
O+OEG

25,000

>35

185

* Source: US EIA Report

Source Rock
Sequences

Sattapadi Shales
Karaikal Shales

Depth
Range(m)

Prognosticated
Resource
Potential
(TCF)

1800-2500

80

Gondwana Basins

Lower Permian to Triassic

age Gondwana sediments
consisting of fluviatile to
Lacustrine deposits of
sandstones, shales and
coal measures
Resource play is Barren
Measure shales
TOC : 4-10%
T max : 440-480
VRo : 1-1.2%
Kerogen : Type III

Stratigraphy of Gondwana Basins

ONGC Shale Gas Find in Gondwana Basin

ONGC created an exploration

landmark when gas flowed out
from the Barren Measure
shale at a depth of around
1,700 meters, in its first R&D
well RNSG-1 near Durgapur
in Gondwana Basin
The Barren Measure Shales
are 858 m thick in the well
drilled
Based on testing results and
laboratory investigations,
Schlumberger has estimated
GIIP of 48 Tcf

Shale Characteristics of Barren Measure Formation

Sub Basin.

Thickness(m)

TOC(%)

VRo(%)

South Rewa

150-800

5.0614.72??

0.40-0.60

123 *

III

Damodar

900-1000

4.00-10.00

1.00-1.20

123 *

III

Karanpura

450-500

ONGC Drilled Pilot wells in Damodar & Karanpura

Sub Basins

Pranhita
Godavari

400-500

5.00-6.41

0.67-1.00

Gas Conc.
Bcf/mi2

No Data

Kerogen Type

III

Discovered Oil & Gas Fields and Proven Source Rock Potential
Area(sq.km)

61,000

No. of Oil &

Gas fields

4 fields in
Homotaxial
sediments

* Source: US EIA Report

Inplace Gas
(BCM)

120

Shale Gas
Resource
Sequences

Depth
Range(m)

Prognosticat
ed Resource
Potential
(TCF)

Barren
measures

1000-2000

85**

** ONGC has established GIIP 48 TCF

Shale Gas Resource Estimates

Why do they vary?
IHS-CERA Report
Schlumberger
Other Experts
Resources: 540 Tcf Resource:600-2000 Tcf Resources:744 Tcf
Recov:211 Tcf
8 Potential basins
Recov:130 Tcf
Eastern

EIA ,USA
NGRI, India
Only 4 Basins studied
Resources:527 Tcf
Shale Gas Estimates
Risked GIP:584Tcf
Recov:260 Tcf
Shale Oil :87 Bn BBls
Recov:120Tcf **
McKinsey
Report
Petrotech Veteran Forum
Rec: 100
USGS,USA
Recov: 130 Tcf
TCF
Only 3 basins studied
5 Basins
Recov: 6.1 Tcf
Damodar Valley Basin(Pilot Wells) :48 Tcf (GIIP) ** Revised

Shale Gas Resource Estimates GIP and

Recoverable Component (Tcf)
800

700

600

500

Resources
REC

400

300

200

100

??
0
HIS

EIA

PetroV

Others

sch

McKinsey

Salient Parameters for Shale Gas

Assessment
Identification
of sweet spots
& thickness

Organic
Richness &
typing

Maturation
Fracturaion
components

Shale Gas
assessme
nt

Gas in Place

Pore
Pressure

Brittleness

Micro
porosity &
Permeability

Mineralogy &
Petrofacies

Characteristics of Shale Units in potential Basins

Basin

Camb Krishna
ay
Godava
Parameters
ri
TOC (%)
1.51.4-5.3
4.0
VRo(%)
0.75- 0.9-1.3
1.20
Thickness(M 500300)
1200 1500
Kerogen
II & III II & III
Type
Gas
231
143
Concentarti
on
Bcf/sq mile
**
Depth (M)
1200- >2000
2000
Prognosticat 217
280
ed
** Source: EIA Report
Resources(T

Cauvery AssamArakan

Gondwa
na

Vindhya
n

0.314.76
0.651.20
300-750
II & III

0.641.00
0.571.94
4001000
II & III

4.0-10.0 0.406.04
0.40No Data
1.20
500>350
1000
III
II&III

143

120

123

No Data

20003000
80

>2500

>2000

>1800

55

85

Not
estimat
ed

DRAFT POLICY
Key Features & Policy
Imperatives

Comparison of Proposed policy vis--vis

existing policy-I
Existing Policy

100% Cost recovery

admissable
Production sharing Contract
(PSC)
Declaration of Commerciality
(DOC) to be approved
FDP requires to be approved
by Govt.
MC constituted DGH/MoPNG
and Consortium members

Proposed Uniform Licensing

Policy

No cost recovery provision

Production Linked payment

regime (PLP) for different tranches
DOC not required However PLP to
be applicable from Day 1 of
production
Although no FDP to be approved,
but prod.profiles & Recoverable
components to be defined.
MC would consist of Officials from
MOEF, MOPNG, Defence,
Finance, Law and Coal Ministry
alongwith Consortium members

Comparison of Proposed policy vis--vis

existing policy- II
Existing Policy

Exploration & exploitation of

Conventional reservoirs only
Controversy on Tax holiday for
gas blocks (Mineral oil)
Royalty @ 10% for Gas and
12.5% for oil
Application of Gas utilisation
policy for Gas discoveries
(pricing, allocation &
prioritisation etc)

Proposed Draft Policy

Exploration & exploitation of ALL

types of reservoirs-both
Conventional & Unconventional
7 year Tax holiday for onland,
shallow water blocks
10 year tax holiday for Deep water
blocks of >1500m water Depth.
No Royalty for offshore blocks
Silent on these aspects of Gas
Utilisation Policy ??

Current scenerio
Oil India Ltd

ONGC

OIL proposes to drill 10-12

Shale gas wells in next 3
years
Jaisalmer block
Jairampur block
Chabua block
Dumduma block
Dibrugarh block
Deomali block

ONGC proposes to drill 50 Shale

gas wells in next 5 years
Cambay Basin, K G Basin,
Cauvery Basin, Ganga Basin and
Assam -Arakan Basin
Pilot wellls are already drilled

- Well RNSG#1 in Damodar

Valley of Gondwana - produced
Shale gas
( GIP Estimated: 48Tcf)
- Well jambusar#55 in Cambay
basin-produced Shale gas
(GIP Estimated: 20Tcf)

Challenges
Identification of prospective intervals within the thick shale
sequences and delineation of sweet spot areas in
potential basins.
Highly cost intensive exploration programme with
attendant development & production operations vis--vis
prevailing regime of regulated gas pricing
Forging relationships and adopting customised innovative
technologies to suit to Indian models
Designing policy and contractual regimes to incentivise
technologically advanced global explorers to invest in
Indian shale gas exploration programme
Land acquisition and related environmental issues in a
populated country like India.

Need of deliberations & Introspection

No Cost recovery mechanism? Will it work/incentivise for
such an cost intensive Shale Gas Exploration programme?
Coupled with regulated gas pricing regime !!
Lack of Subsurface G & G data on shales specific to Shale
Gas exploration.- will it attract global investors?
Why not permit current NELP block holders to explore
Shale gas in their blocks with requisite modifications in
PSC
Has the govt decision to allow NOCs only to explore
Shale gas in their nominated areas sent any wrong
signals to global community??

Closing Remarks
India has sedimentary basins with proven mature organically rich

source rock indicative of significant shale gas potential

Based on preliminary data analysis and geologic assumptions
significant resource potential to the tune of 540 tcf is prognosed
of which recoverable component could be around 120 tcf.
However, in order to arrive not only at realistic estimates but also
to develop and exploit Shale gas, specific G & G
studies/investigations on Shale samples and seismic and other
data analysis is required to be carried out .
This can be achieved by drilling parametric wells by NOCs (ONGC
& OIL) in their nominated blocks at an accelerated pace and then
to carry out the detailed specific Laboratory investigations and
seismic data acquistion & processing .
Finally , I may say that Shale Gas exploration need not have any
separate policy or bid round, as it is an integral activity of
hydrocarbon exploration.
At this juncture,our Policies should focus on maximising
exploration & discoveries rather than on concentrating on
maximising profits.

Thank you..