India will launch bidding for shale gas exploration before the end of 2011 and hopes to ink a technology
sharing agreement with the U.S. to help it develop the resource, officials said on Monday.

Although India's estimated shale gas reserves are not known, the government is assessing the country's potential for the energy source and is seeking data and technology from the U.S., petroleum ministry officials said on Monday.

"The DGH (Directorate General of Hydrocarbons) has identified certain basins on the basis of prospects," Petroleum Secretary S. Sundareshan said on Monday at the opening of a new bidding round for conventional oil and gas blocks.

"We also had discussions with other experts, and we are hopeful of signing an MOU (memorandum of understanding) with the U.S. government for sharing data and for identifying basins where there is potential," he said.

India, the world's fourth-largest oil importer, hopes to clinch an initial pact with the U.S. when U.S. President Barack Obama visits in early November, Petroleum Minister Murli Deora told reporters.

Technology to extract gas from shale involves drilling multiple horizontal wells and using hydraulic fracturing to release gas from tight reservoirs, and has transformed the U.S. energy market in recent years. India's top company by market capitalization, Reliance Industries, acquired a 60% stake in a U.S.-based shale gas joint venture in August, taking its shale gas assets in the U.S. to three.

India will have to accommodate certain legal and policy changes before it can open the domestic market for shale gas exploration, a senior official at the petroleum ministry said.

"We are proposing some legislative changes so that more than one operator can explore oil, gas and shale gas at a single block at any particular time," S.K. Srivastava, the country's director general of hydrocarbons, said at the event.

While shale formations have proven to be promising, they are expensive to develop and environmentally sensitive. A handful of Indian companies are interested in exploring for the naturally available gas.

State-run explorer Oil and Natural Gas Corp had announced in September that it had drilled the first exploratory shale gas well in eastern India.

Officials at another state-run firm, Oil India, have also said that the firm is scouting for shale gas assets in the U.S. and Australia.