The Ministry of Petroleum and Natural Gas is likely to finalise the Cabinet note for the country’s shale gas policy by the end of FY13.
The key features in the draft policy related to cost recovery are being retained in the Cabinet note. The draft had proposed a royalty and production-linked payment for auction of shale gas acreage. Cost recovery in blocks offered under the New Exploration Licensing Policy (Nelp) has been at the centre of the dispute between the Central Government and Reliance Industries. The draft policy suggested a fiscal regime similar to the regime adopted for coal bed methane (CBM) operations, where cost recovery is now allowed.