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Hydraulic fracturing in India: Shale potential & policy Dr. D K Gupta Professor & Head Department of Petroleum Engineering & Earth Sciences University.

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Presentation on theme: "Hydraulic fracturing in India: Shale potential & policy Dr. D K Gupta Professor & Head Department of Petroleum Engineering & Earth Sciences University."— Presentation transcript:

1 Hydraulic fracturing in India: Shale potential & policy Dr. D K Gupta Professor & Head Department of Petroleum Engineering & Earth Sciences University of Petroleum & Energy Studies, Dehradun, India December 6 - 7, 2013 Jaipur Marriott Hotel, Jaipur, India December 6 - 7, 2013 Jaipur Marriott Hotel, Jaipur, India

2 Outline India has good shale gas potential Horizontal drilling and Hydraulic fracturing Microseismic emissions – Heartbeats of a reservoir Guar gum its in ice cream, toothpaste,cosmetics,paper industry, and hydro-fracking ….. Shale gas policy -- a game changer Conclusions

3 Technology and market-based pricing are two factors to lead shale gas revolution PM Manmohan Singh Indias energy needs may increase 3 to 4 times within the next 20 years Foreign Secretary Sujatha Singh will be in the U.S. this month, with shale gas imports and technology transfer New gas price formula approved by the Cabinet in June 13. Would double the domestic gas prices and encourage energy firms to invest in exploring shale gas. The recently approved shale policy, which allowed only state-run ONGC and OIL to explore shale resources in their existing oil and gas blocks. The ministry has proposed automatic extension of lease period in blocks held by private companies if they are interested in exploring shale gas 8th Asia Gas Partnership Summit 3 rd Dec 2013,New Delhi

4 Good times!

5 India has good shale gas potential

6 Shale gas prospects ONGC, OIL and RIL strongly placed to ride the emerging shale gas play

7 Shale gas is a "game changer" in energy markets

8 Rapid build-up of momentum in preparatory activities

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10 Horizontal drilling and hydro-fraccing are crucial for extraction

11 Closure Pressure Net Pressure is the Pressure Inside the Fracture Minus the Closure Pressure Net Pressure = 2, ,000 = 500 psi

12 Hydraulic Stimulation Fluid injection Microseismic events

13 The idea that the stimulation process will take care of the geology in unconventional reservoirs is proving false.

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15 Shale gas policy -- a game changer Draft policy for shale gas, inviting suggestions from the general public, stakeholders, environmentalists The pricing formula will be effective from April 1, 2014 for a period of five years,, the effective gas price in April 14 is estimated at around $8.40 per MBTU, double the current price of $4.20. The price for each quarter will be calculated based on the 12-month trailing average price with a lag of one quarter (ie price for April to June 2014 will be calculated based on the averages for 12 months ended December 31, 2013) The policy brief points out that conventional gas can occur by itself or in association with CBM Draft policy suggests that there should be a mandatory rainwater harvesting provision in the exploration area

16 Challenges There are two key challenges that need to be addressed upfront for smooth implementation of the shale gas policy: 1.Land lease mechanism- required minimum of 80 to 160 acres. 2. Water management practices - it takes 2 million to 4 million gallons of water to drill and fracture a horizontal shale gas well

17 Guar gum Guar gum: its in ice cream, toothpaste,cosmetics and hydro-fracking ….. Its a thickening agent How big boom is it? One estimate suggests that a typical oil well consumes roughly 4,000 kilograms of guar gum.That pressure sent the price soaring–it touched $28,000 a metric ton in 2012, up twelvefold in a single year. According to Halliburton, guar represents about 30 per cent of the cost of fracking Is the bean at risk of being replaced? Not likely. As a natural product, it is environmentally friendly. And even when guar costs 10 to 15 per cent more than chemical substitutes, drillers still prefer the real thing. You have to have a big economic incentive to switch, Browne says. Theyd rather use the tried-and-true product. The run on guar has led India to start ramping up production

18 Conclusions India has prospects of 600-2,000 TCF shale gas reserves as per the Schlumberger estimates. 34 tcf of shale gas in the Damodar basin alone (compared to Indias total conventional gas reserves of 47 tcf) as per the ONGC. E&P companies will be able to initiate concrete action once the policy is ready and its production is still 2-3 years away from now. Earlier, guar gum was used mainly as an additive in ice creams and sauces, but its use in shale gas extraction has risen enormously

19 Help each other! HavePatience Have Faith 3 Hs The key to everything is patience. You get the chicken by hatching the egg, not by smashing it. – Arnold H. Glasgow

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