Oil and Natural Gas Corporation has come up with new tactical move
to drive down the cost of production of oil and natural gas. ONGC plans to
increase the competition in the FRACKING by bringing the new small players from
Texas and North Dakota so, that it can reduce the dominance of major player in
the sector like Schlumberger, Haliburton and Baker Hughes.
So, two question arise here
First, what is the fracking?
Second, How it affect the cost?
FRACKING or Hydraulic fracturing is a
well-stimulation technique in which rock is fractured by a hydraulically pressurized liquid
made of water, sand, and chemicals. Some hydraulic fractures form
naturally—certain veins or dikes are examples. A high-pressure fluid (usually chemicals and sand suspended
in water) is injected into a wellbore to create cracks
in the deep-rock formations through which natural gas, petroleum, and brine will flow more freely. When
the hydraulic pressure is removed from the well, small grains of hydraulic
fracturing proppants (either sand or aluminium oxide) hold the fractures open.
This technique is very unconventional and very popular for shale
gas production in North America. There are many small companies which are using
this technique to produce the shale gas and ONGC is planning to attract them
about the investment opportunities in India. Because its always beneficial for
the customer to have competition in the market.
It’s always a matter of debate whether OPEC with conventional
drilling or Shale gas producer with unconventional fracking is able to produce
it at cheaper rate, But there are claims that shale producers have the upper
hand. So, it may prove a great move to bring the small players and increase the
competition.
This move depicts the Make In India initiative by govt. As we are
opening up for the foreign investor and simplifying the business opportunities
in India.
