Why is Oil India planning to exit its Shale investments in the US?

Oil India Ltd, India’s second largest oil and gas extractor after ONGC, has decided to exit its US shale oil venture investments. Oil India has decided to sell its 20% stake to its venture partner for a value of $25 million. This makes Oil India the second Indian hydrocarbon company after Reliance Industries to fully exit the US shale business. Reliance had also done the same last year on weak prospects for shale extraction.

It may be recollected that Oil India and IOCL had jointly bought 30% stake in Carrizo’s Niobrara shale assets in the state of Colorado in 2012. Currently, GAIL continues to hold 20% stake in Carrizo's Eagle Ford shale venture, which Reliance had already exited in the previous year. The decision is not hard to fathom. With the world moving away from fossil fuels, upstream companies are cutting down shale franchises to conserve costs.