India will auction the first of its shale gas blocks by the end of 2011, joining a boom in exploration for the unconventional fuel as the country seeks to reduce its energy shortfall.

“Resource assessment, policy framework and legislative changes are in progress” for the auction, S.K. Srivastava, head of the Directorate General of Hydrocarbons, the nation’s oil regulator, said at a conference in New Delhi today.

Shale-gas exploration has fueled more than $39 billion of acquisitions in the U.S. by companies including Exxon Mobil Corp., Royal Dutch Shell Plc and Reliance Industries Ltd. India faces an energy shortfall of 55% by 2030 as demand more than doubles to the equivalent of 1.3 billion metric tons of oil, according to the Paris-based International Energy Agency.

India signed a preliminary shale-gas accord with the U.S. aimed at determining shale-gas reserves in the South Asian nation, oil minister Murli Deora said Nov. 8. The U.S. will also help India prepare for its first shale-gas auction, scheduled to be held by the end of 2011, oil secretary S. Sundareshan said.

India will need to change exploration laws to allow for the production of shale gas as current licenses don’t include unconventional sources, Sundareshan, the top bureaucrat in the oil ministry, said in October.

Preliminary estimates show India’s shale-gas reserves may exceed its proven conventional gas deposits, according to P.K. Bhowmick, president of the country’s Association of Petroleum Geologists.