Harnessing the Indian Shale Gas Potential
Strategic Concerns & Points to ponder
Dr.V.K.Rao
IUGF2013
Disclaimer
The views and opinions expressed in the presentation material are of speaker/author only and not necessarily of the Organisation he is working
Concept Transformation
In pursuit of conventional Oil/Gas Exploration over the years, Geologists regarded Shales as:
Source Rock by virtue of the richness of organic material content, its thermal maturity, hydrocarbon generation potential and geographic spread over large areas
Cap Rock by virtue of their impermeable nature and compactness thus acting as good seal
3856
4569
2587
3962
5661
1381
10691225
624
1042
1404
396
World Shale Gas Potential (Tcf)
Rogner,HH ModifiedTotal: 22,016 Tcf GIP
Shale Gas Recov. Reserves (Tcf)
EIA World Shale Gas Resources (Assessment of 14 Regions)
Tcf
Middle East, ,Former Soviet Union &Asia Pacific are excluded
Strategic Compulsions
Rapidly growing Gas markets Widening Demand-Supply gap India has high Natural Gas
prices Increasing dependency on LNG
imports Nascent CBM industry Rising Energy Consumption Transnational Pipelines-
indecisions & impediments Rising Energy Import bills with
alarming consequences
In Asia-Pacific Region the gas market rise is around 6.5% p.a.• The world average is around 2.5 % only• While the India Gas market rise is more than 7%
Gas Market Rise
0
50
100
150
200
250
300
350
400
1 2 3 4 5 6 7 8
Years
MM
SC
MD
/%
ag
e rise
MMSCMD
Percentage rise
India-Gas Market Rise
EXPANDING GAP…….
Supply cannot outpace Growing Demand
Natural Gas
MM
SC
MD 426
303
155
136
The Indian Energy Scenerio
India’s Energy Consumption has been increasing at a rapid rate due to population growth and economic development(GDP Growth rate @8% pa)
Coal ,Oil and Gas are Primary Energy sources
Although intense efforts are made to increase indigenous Oil/Gas production,we could meet only <30% of our domestic requirement through conventional Reservoirs
This widening gap between demand and Supply coupled with volatality of oil prices can be reduced through unconventional gas production as it has huge potential in Indian Context.
Natural Gas Demand-Supply Projections for India
Source :McKinsey & Co. presentation slide
12-14$/MMBTU
Growing Dependancy on LNG Imports
0
10
20
30
40
50
60
2005-06 2010-11 2015-16 2020-21
(MMTPA)
Operational
Under Commissioning
PlannedLNG Imports are estimated to cost US$ 21 billion by 2021
LNG Terminal Capacity (MMTPA)
Dahej 5
Dahej Exp 5
Shell Hazira 3.5
Dabhol 5.5
Kochi 2.5
Mundra 6.5
Mangalore 5
Ennore 5
Pipavav 5
Haldia 2.5
Kandla 2
Gangavaram 5
Total 52.5
CBM- nascent stages
• A total 33 Blocks are awarded in 4 Bid Rounds
• Total CBM area covered 18,540 sq kms
• Prognosticated Resources 65.7 tcf
• Only 8.39 tcf inplace is established
• Commercial production of 0.25 MMSCMD only is achieved till date
• Projected Production of 7.4 MMSCMD by 2014-15
Transnational Pipelines
Transnational Pipe lines Pipe lineSegment
Length (kms)
Cost (BnUS$)
Capacity MMSCM/Day
India’s ShareMMm3/day Remarks
Iran –Pakistan-India
2725 7.5 150 30-40 Yet to materialise
Turkeministan-Afghanistan-Pakistan-India
1735 7.6 90 38.0 Signed
Myanmar-Bangladesh-India
900 1.0 60 18.0 Could not materialise
As per working group of Petroleum & Natural Gas ,Govt.of India
the Domestic Gas Production during the period 2016-17 to 2021- 22 will not increase significantly the demand for gas in the country will be met by import of LNG to the tune of 130 MMSCMD i.e. 40% of then demand in 2013-14 and will increase to 184 MMSCMD i.e. 45% of then demand expected in 2016-17. Thereafter, the country may import both LNG and cross-country piped gas to the tune of 258 MMSCMD or 57% of then demand in 2017-18 to2021-22.As per World Energy Outlook Report(2009)-India will be the only country in the world investing 6.0% of its GDP on Oil /Gas importsThis is a very serious situation as during the period 2025-2030 the import of Crude Oil may reach 90% and import of Natural Gas can be between 54-60%. Indian Economy can not sustain the projected Energy importsThis may have disastrous consequences for country’s Security and Foreign Exchange position.
Projection of Demand & Import
Source: Dr. A. Chandra
Points to Ponder
Varience in Resource estimatesAnalogy with US BasinsDo we need a separate Shale gas Blocks bid Round and Shale Gas Policy?
Varience in Resource Estimates
Agencies and Estimates
Potential Shale Gas Basins
1. Cambay Basin2. Gondwana Basin3. Assam-Arakan Basin4. Krishna-Godavari Basin5. Cauvery Basin6. Vindhyan Basin7. Bengal Basin8. Rajasthan Basin
Eastern
Schlumberger Resource:600-2000 Tcf
Other ExpertsResources: 540 Tcf8 Potential basins
Recov:140 Tcf
NGRI, IndiaResources:527 Tcf
Recov:260 Tcf
Petrotech Veteran ForumRecov: 130 Tcf
5 Basins
Shale Gas Estimates
McKinsey ReportRecov:100Tcf
EIA ,USAOnly 4 Basins studied
Risked GIP:293TcfRecov:63 Tcf
USGS,USAOnly 3 basins studied
Recov: 6.1 Tcf
Shale Gas Resource Estimates
Damodar Valley Basin(Pilot Wells) :48 Tcf (GIIP)
EIA study - India
Estimates in Jan 2011, quote as stating Indian resources in the range of 600-2100 TCF
Shale Characteristics of Cambay Basin
Formation Thickness(m) TOC(%) VRo(%) Gas Conc.Bcf/mi2
Kerogen Type
Olpad 340-2700 1.5-4.0 0.60-0.75 No Data II & III
Older Cambay Shale
500-1900 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
Kalol 200-300 No Data 0.75 No Data
Tarapur 60-400 1.00-1.2 0.53 No Data II & III
* Source: US EIA Report
Discovered oil & Gas Fields and Proven Source Rock PotentialDiscovered oil & Gas Fields and Proven Source Rock Potential
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
Tarapur shales
1500-2500 217
Shale Charecteristics of Krishna-Godavari Basin
Formation Thickness(m) TOC(%) VRo(%) Gas Conc.Bcf/mi2
Kerogen Type
Vadaparru >400 2.00-3.00 ?? No Data II & III
Palakollu >500 0.60-23.0?? 0.35-0.40 No Data II & III
Raghavapuram >1800 1.00-4.00 0.90-1.30 143 * II & III
Kommugudem >900 1.20-30.00??
1.00-1.30 156 * II & III
* Source: US EIA Report
Shale characteristics of Assam-Arakan Basin
Formation/Gp. Thickness(m) TOC(%) VRo(%) Gas Conc.Bcf/mi2
Kerogen Type
Upper Disang 250-400 1.69-4.00 0.90-1.94 120 II & III
Kopili >500 1.00-6.20 0.92-1.44 No Data II & III
Jenam 900-1200 2.50-4.50 0.64-1.20 No Data II & III
Bhuban 800-1000 0.31-1.36 0.90-1.00 120 II & III
Bokabil 400-1000 0.64-2.40 0.57-0.62 No Data II & III
* Source: US EIA Report
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
Portnovo 200-340 0.31-4.76 0.65-0.79 No Data II & III
Kudavasal 800-1100 1.68-2.00 0.34-0.55 143* II & III
Sattapadi 300-500 1.50-1.75 1.00-1.12 No Data II & III
* Source: US EIA Report
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
Shale Characteristics of Barren Measure Fm.
Sub Basin. Thickness(m) TOC(%) VRo(%) Gas Conc.Bcf/mi2
Kerogen Type
South Rewa 150-800 5.06-14.72??
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 No Data III
* Source: US EIA Report
Shales in Stratigraphy
Ganorgarh and Sirbu shales
Chakaria Olive shales
Formation Thickness(m)TOC%
VRo %Kerogen
Type
Chakaria Olive shale 320 0.60-6.04
No Data
II & III
Hinota shale
90 0.56-3.89 II & III
Rewa shale225 0.07-0.40 II&III
Pulkova shale
21035.0-37.85
II & III
Suket shale100 0.04-0.37 No Data II & III
Ganurgarh Shale 75 No Data
Shale characteristics of Vindhyan Basin
Why are they Vary?
• Various Agencies have projected the Resources based on their perceptions of Indian Shales. Thus The resource prognostications are varied and are subjective.
• Lack of Shale gas specific laboratory investigations/data• Crucial parameters on Indian shales in terms of their
heterogeneity, gas content, TOC, VRo, diagenesis, brittleness etc are not available
• Shale isopachs, dispositions and TOC ,VRo and Gas concentration maps are not prepared for many potential basins
• No pilot wells /parametric wells are drilled to explore shale gas in all our basins
Commendatory Factors
Thick shale sequences in Sedimentary basinal areas
Comparable TOC & VRo values to producing US Basins
Proven source rock characteristics for discovered oil& Gas fields in producing Basins
Demonstrated case studies of shale gas finds
Estimated Resource Potential - Substancial
Rapidly growing economy
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Analogy of USA & Indian Basins
Shale Gas: Risking Parameters
Shale Gas: Risking Parameters
Analogy with US Basins
Do we require a Separate Shale Gas Policy?(Vertical Operational window)
“Specific Operational window in terms of subsurface vertical depth for shales would be indicated “ (Draft Policy)
The occurrence of geologic Formations in the subsurface are governed by many factors notable among them are:
- Dip of the Formation - Fault patterns - Facies changes - Intertonguing features - Erosional aspects - Transgressive ®ressive environs These factors affect the subsurface formations over geographic areas it is difficult to understand how the vertical operational window for
Shales would be defined /delineated in a given block area. Thus the statement is geologically untenable
Do we require a Separate Shale Gas Policy?(Multiple policy regimes)
• “Different policy regimes govern different operators for simultaneous exploration & exploitation of conventional & unconventional hydrocarbons in the same block area”
(Draft Policy)• Geologic formations can occur intertwined or
shale/sand /siltstone alterations within a given interval
• It is difficult to foresee how simultaneous operations by different operators can take place under different regulatory & fiscal regimes .
• This is technically untenable concept
Do we require a Separate Shale Gas Policy?(Focussing priorities)
• Major Concerns in Shale Gas Exploration pertain to three significant aspects Viz;
- Environmental Externalities - Water management - Land acquisition• Shale Gas exploration can be permitted in any exploration
block(NELP or Pre-NELP) subject to strict compliance of environmental externalities and adherence of the laws of land
• Innovative policies Viz; Equity to Land owners • It is time that the Policies be focussed on maximising the
exploration and attendant discoveries rather than maximising on profits
Learning from International Licensing Regimes
• No specific federal shale gas extraction policy exists in USA nor in Poland, Germany, France
• However various environmental acts exist
• The authorities are responsible for regulating oil /Gas exploration activities to oversee many related aspects viz:Well spacing, Hydraulic fracturing, Water management environmental code etc
• In many countries exploring shale gas , the authorisation & permit is governed by legislation for E & P activities (conventional & unconventional)
• In short, shale Gas exploration need not have any separate Policy or bid round, as it is an integral activity of hydrocarbon exploration
Closing Remarks
India has strategic compulsion to explore and develop shale gas dictated by its widening gap between supply and demand due to rising energy consumption and economic development
The thick shale sequences with proven source rock characteristics in many sedimentary basinal areas is indicative of huge shale gas potential.
The Resource estimates vary based on different perceptions of Indian Shales contributed by lack of sufficient shale gas specific data .This data gap needs to be filled up fast
The focus should be to accelerate Shale gas exploration in the country by forging partnership with technologically advanced explorers
Separate shale gas exploration policy may not be needed as shale gas exploration is an integral part of hydrocarbon exploration. Strict regulatory and environmental legislations can govern the activities
Let us focus on maximising the Exploration and discoveries rather than maximising the Profits
Thank you…..
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