Sunday, June 16, 2013

US EIA Estimates Pak Shale Oil Reserves at 9.1 Billion Barrels

Pakistan has more shale oil than Canada, according to the US Energy Information Administration (EIA) report released on June 13, 2013.

The US EIA report estimates Pakistan's total shale oil reserves at 227 billion barrels of which 9.1 billion barrels are technically recoverable with today's technology.  In addition, the latest report says Pakistan has 586 trillion cubic feet of shale gas of which 105 trillion cubic feet (up from 51 trillion cubic feet reported in 2011) is technically recoverable with current technology.

The top ten countries by shale oil reserves include  Russia (75 billion barrels), United States (58 billion barrels), China (32 billion barrels), Argentina (27 billion barrels), Libya (26 billion barrels), Venezuela (13 billion barrels), Mexico (13 billion barrels), Pakistan (9.1 billion barrels), Canada (8.8 billion barrels) and Indonesia (7.9 billion barrels).

Pakistan's current  annual consumption of oil is only 150 million barrels. Even if it more than triples in the next few years, the 9.1 billion barrels currently technically recoverable would be enough for over 18 years. Similarly, even if Pakistan current gas demand of 1.6 trillion cubic feet triples in the next few years, it can be met with 105 trillion cubic feet of  technically recoverable shale gas for more than 20 years. And with newer technologies on the horizon, the level of technically recoverable shale oil and gas resources could increase substantially in the future.

Source: US EIA Report 2013

As can be seen in the shale resource map, most of Pakistan's shale oil and gas resources are located in the lower Indus basin region, particularly in Ranikot and Sembar shale formations. 

Source: US EIA Report 2013

Since the middle of the 18th century, the Industrial Revolution has transformed the world. Energy has become the life-blood of modern economies. Energy-hungry machines are now doing more and more of the work at much higher levels of productivity than humans and animals who did it in pre-industrial era. Every modern, industrial society in history has gone through a 20-year period  where there was extremely large investment in the power sector, and availability of ample electricity made the transition from a privilege of an urban elite to something every family would have. If Pakistan wishes to join the industrialized world, it will have to do the same by having a comprehensive energy policy and large investments in the power sector. Failure to do so would condemn Pakistanis to a life of poverty and backwardness. 

The availability of large domestic shale oil and gas expands the opportunity to reduce Pakistan's dependence on imports to overcome the current energy crisis and to fuel the industrial economy.  But it'll only be possible with high priority given to investments in developing the energy sector of the country. 

Related Links:

Haq's Musings

US EIA International Data on Per Capita Energy Consumption

Pakistani Guar in Demand For American Shale Fracking

Affordable Fuel for Pakistan's Electricity 

Pakistan Needs Shale Gas Revolution

US Census Bureau's International Stats  

Pakistan's Vast Shale Gas Reserves

US AID Overview of Pakistan's Power Sector 

US Can Help Pakistan Overcome Energy Crisis

Abundant and Cheap Coal Electricity

US Dept of Energy Report on Shale Gas

Pakistan's Twin Energy Crises

Pakistan's Electricity Crisis

Pakistan's Gas Pipeline and Distribution Network

Pakistan's Energy Statistics

US Department of Energy Data

Electrification Rates By Country 

CO2 Emissions, Birth, Death Rates By Country

China Signs Power Plant Deals in Pakistan

Pakistan Pursues Hydroelectric Projects

Pakistan Energy Industry Overview

Energy from Thorium

Comparing US and Pakistani Tax Evasion

Pakistan's Oil and Gas Report 2010

Circular Electricity Debt Problem

International CNG Vehicles Association

Rare Earths at Reko Diq?

Lessons From IPP Experience in Pakistan

Correlation Between Human Development and Energy Consumption


Roland said...

but isn't the use of all that oil going to kill all of us through climate change?

the temperatures in karachi are right through the roof right now!

Riaz Haq said...

Roland: "but isn't the use of all that oil going to kill all of us through climate change? the temperatures in karachi are right through the roof right now!"

Pakistan is among the lowest emitters of carbon and yet it's already suffering from the double whammy of lack of energy at home and the effects of climate change from the rest of the world emitting huge amounts of greenhouse gases. Any incremental emissions from Pakistan would make little difference to climate one way or the other.

Sivaramakrishna said...

In India we are focussing more on safer nuclear fuel technology prototypes

The Kakrapar-1 reactor is the world's first reactor which uses thorium rather than depleted uranium to achieve power flattening across the reactor core.[37] India, which has about 25% of the world's thorium reserves, is developing a 300 MW prototype of a thorium-based Advanced Heavy Water Reactor (AHWR).

The prototype is expected to be fully operational by 2013, after which five more reactors will be constructed. The reactor is a fast breeder reactor and uses a plutonium core rather than an accelerator to produce neutrons. As accelerator-based systems can operate at sub-criticality they could be developed too, but that would require more research.

India currently envisages meeting 30% of its electricity demand through thorium-based reactors by 2050.

Shere said...

This is an encouraging report.

Surprisingly, couple of years back, while I was visiting Karachi and was invited by Nooruddin Ahmed (a friend from my tenure in NED, 1963-67) to a speech by Dr. Samarmand at the Institution of Engineers, I enquiring of him if Shale in Pakistan has any potential for oil production and clearly remember him telling me that the Shale in Pakistan is not hydrocarbon bearing so there is no such possibility. He also had mentioned, when I had asked, that Fischer-Tropsche method for converting gas to diesel is not feasible for Pakistan gas industry. Whereas, I know from my exposure to the hydro-carbon industry in the States, that this an excellent way to tap the energy from isolated gas wells which could not be connected to the grid because of their limited production feasibility.

With energy shortage we are experiencing in Pakistan, it may be good time to explore all the areas of energy development to harness all available potentials.

Thanks for your 'musing' which I enjoy immensely.

Riaz Haq said...

Shere: "...a speech by Dr. Samarmand at the Institution of Engineers, I enquiring of him if Shale in Pakistan has any potential for oil production and clearly remember him telling me that the Shale in Pakistan is not hydrocarbon bearing so there is no such possibility."

Dr. Mubarakmand has lately been singularly focused on coal, particularly coal gasification, at Thar, and he wants all of the funding and focus to go to his endeavor at the expense of all other options.

But experts at US EIA and other hydrocarbon professionals are focusing more and more on the shale potential after the successful shale gas revolution in the United States.

I think the focus on shale it's the right kind of focus for several reasons including the higher BTU content and lower environmental impact of non-Thar-coal options.

Hopewins said...

^^RH: "I think the focus on shale it's the right kind of focus for several reasons including the higher BTU content and lower environmental impact of non-Thar-coal options."

Let us say we go an invest billions in shale oil processing facilities. And this may well be profitable with Oil at 100$ per barrel.

But what if oil prices drop, such that shale oil is no longer competitive?

We will just fire all the workers and idle our shale plants while IMPORTING cheaper conventional oil?

If we don't, what would the expensive domestic oil do to our export competetiveness?

If we do, where will all those workers go? Who will pay all the interest on the debt accumulated to fund the now-idle plants?

Yes? Have you really thought all this through? Or is this more of the usual arm-chair idle dreaming?

Hopewins said...

Siva said: 'India currently envisages meeting 30% of its electricity demand through thorium-based reactors by 2050."

Can you show me a SINGLE example of India EVER having accomplished what it "envisaged" on a long-term basis? If not, why should this "thorium-based plan" be any different?

RESULTS. Not talk, not plans, not hopes, but actual results are what really count.

Riaz Haq said...

HWJ: "Let us say we go an invest billions in shale oil processing facilities. And this may well be profitable with Oil at 100$ per barrel. But what if oil prices drop, such that shale oil is no longer competitive?"

Here's my take on it:

1. Going by recent shale gas leases at $4-$5 per mmBTU (vs Iran gas at $12 per mmBTU), it is highly unlikely that shale oil leases would be at the market price of $100 per barrel.

2. A significant component of the payment for oil would be Pak rupees, not US $. And a major component would return to govt as lease payment.

3. It's highly unlikely that hydrocarbon price would decline with growing global energy demand. It's much more likely that oil and gas prices will rise.

Riaz Haq said...

Siva: "In India we are focussing more on safer nuclear fuel technology prototypes'

Here's a comment I got on my post on thorium about three years ago:

Thorium cycle is promising but difficult to master the basic thing is fluroide salt is very corrosive and thus unsafe the desi approach is to use CANDU reactors but this needs lots of pluonium to kick start the process i.e pu fissions and converts th232 into u233 which inturn breeds more u33 till after 5 yrs it becomes self sustaining i.e you just put th232 for the next 60 years.
India will comission the first such plant (300MWe)in 2015 but it may well be a tech dead end.

Hopewins said...

1. Going by recent shale gas leases at $4-$5 per mmBTU (vs Iran gas at $12 per mmBTU), it is highly unlikely that shale oil leases would be at the market price of $100 per barrel.

The only reason GAS prices collapsed in the US is because supply exceeded demand. The only reason Iran/Qatar charge more in Asia is because the US glut cannot easily be exported to Asia.

But this has nothing to do with Shale OIL.

2. A significant component of the payment for oil would be Pak rupees, not US $. And a major component would return to govt as lease payment.

No investor will touch the project unless GOP agrees to one of two things:
(1) Allow the investor to sell the Oil in global markets (and Pakistani companies will have to pay global price if they want any oil), OR,
(2) Assure the investor of fixed price purchase by GOP of all the oil produced.

If we choose (1) and global oil prices fall, the investor may be forced to shut down the plants.
If we choose (2) and global oil prices fall, the investor will be okay, but GOP will be hammered by being forced to buy the oil at higher prices than global competitors.

The royalties payable to the government may provide the GOP with a small buffer, but they make little difference to Pakistani customers and local industry in terms of actual price.

3. It's highly unlikely that hydrocarbon price would decline with growing global energy demand. It's much more likely that oil and gas prices will rise.

The prices of all hard commodities rose along with oil in the last 9-10 years because China kept accelerating its investment rate. Now that China has deliberately braked it run-away investment spree, prices of hard commodities (along with oil) should head downwards over the next 10 years.

In addition, if Solar reaches grid-parity in price in the next 7-8 years, electric cars may take off and collapse oil prices. What would happen to the billions sunk into exotic shale oil & gas in Pakistan if that were to happen?

All of this seem very, very RISKY. It may be okay for a capital-rich or capital-attractive country like US, but seem far-fetched for a capital-poor country like ours.

are heredTop

Sivaramakrishna said...

Thorium based reactors are fully operational based in south Gujarat. The last phase just got completed at Kakrapar.

It is true that whenever the Government is in charge things may not get done as planned however scientists from Germany and US are collaborating as well. Ultimately, it is the desire to be less dependent on foreign oil

Riaz Haq said...

HWJ: "The only reason GAS prices collapsed in the US is because supply exceeded demand. The only reason Iran/Qatar charge more in Asia is because the US glut cannot easily be exported to Asia."

The $4-5 price per mmBTU I mentioned are for recent shale gas leases in Pakistan, not US.

HWJ: "The prices of all hard commodities rose along with oil in the last 9-10 years because China kept accelerating its investment rate."

China is no longer the only game in town; other Asian and African nations are now growing more rapidly.

And even in China, the per capita energy consumption is only a fraction of that in more developed economies of Asia and Europe.

Hopewins said...

^^RH: "The $4-5 price per mmBTU I mentioned are for recent shale gas leases in Pakistan, not US"

Those were hoped-for contract prices mentioned in the 2009 policy. There were NO bidders that that price.

GOP's best offer was a SINGLE bid at effective 6.5$/mmBTU base price from a Polish company called Polish Oil and Gas Company.

QUOTE: "The government in 2012 approved a new exploration policy, with improved incentives, as compared to the 2009 policy, even offering higher prices for shale and tight gas to the exploration companies. It is estimated that Pakistan would pay $6.50/MMBtu for gas compared with $11/MMBtu for imported gas from Iran and $13/MMBtu from Turkmenistan.

Companies are now being offered 40-50 percent higher prices for the extracted gas compared with the $4.26/mmbtu price announced in Exploration and Production Policy. Companies which succeed in recovering gas from tight fields within two years would get another 50 percent hike over the contract price. As an added incentive, the leases for the fields will now be for 40 years, instead of 30 in the policy".

Note carefully that GOP is offering to pay the POlish company effectively 8-9$ per mmBTU fixed contract price regardless of international prices. If the US starts exporting gas to Europe and ASIAN gas prices collapse to 3-4$ mm/BTU as they were 6-7 years ago, GOP will be STUCK with overpriced gas.

This is a risky gamble.

Riaz Haq said...

HWJ: "Note carefully that GOP is offering to pay the POlish company effectively 8-9$ per mmBTU fixed contract price regardless of international prices. If the US starts exporting gas to Europe and ASIAN gas prices collapse to 3-4$ mm/BTU as they were 6-7 years ago, GOP will be STUCK with overpriced gas."

Even at $8 per mmBTU (which is a one-time incentive for early production), it's still cheaper than the $11-12 for imports from Iran and Turkmenistan which is linked to the price of oil.

And, don't forget, the domestic gas will be paid for mostly in Pak rupees, not in US $.

Anonymous said...

Thorium based reactors are fully operational based in south Gujarat. The last phase just got completed at Kakrapar.

Nope! Those reactors use Thorium for flux flattening etc but Thorium is far from being hteir primar power source!

The worlds first Thorium powered commercial nucear reactor is the Advanced Heavy Water Reactor(AHWR) a 300MW reactor still under construction.

A dead end with the advances in extracting Uranium from seawater it is only a matter of time when we have unlimited uranium(there are 5 billion tonnes of the stuff in sea water)

Whether we really want a all nuclear solution is a moot point as a perfectly safe N power plant doesn't really exist.

Still the thorium powered reactor is definately worth applauding atleast something we did on our own and are the first in the world in!!

Riaz Haq said...

Here's a summary of a market research report on developing oil and gas resources in Asia Pacific, including Pakistan:

The new Asia Pacific shale gas report from OGANALYSIS noted that soaring demand, rapidly escalating LNG prices are forcing countries to look for possibility of shale gas production. In particular, China and India are witnessing rapid rise in demand and accordingly are planning to realize shale production earlier than planned. Australia is also planning to exploit its shale reserves to supply feed gas for its planned liquefaction terminals.

Success of the US shale and ongoing activities in Europe are encouraging Asian players to develop policy and frameworks for shale gas development. While China is allowing foreign companies to participate in shale exploration, India is planning to launch first bids in 2013. Over 10 companies are actively perusing shale operations in Australia and Pakistan and Bangladesh are in plans of identifying their reserve potential.

The report analyzes the current status, potential and feasibility of shale development, ongoing activities, government stance and companies operating in each of the key Asian shale markets including Australia, china, India, Pakistan and Bangladesh. The research work also identifies the top trends of Asia Pacific shale market. Key drivers and challenges faced by countries along with feasibility of first commercial production are also discussed in detail. Further, the Asia Pacific shale gas report from OGANALYSIS discusses physical characteristics of major basins in each country along with their reservoir properties and resource characteristics. Further, shale formations and key plays in each basin are discussed in detail. Basin wise company information along with the current status of activities in permits awarded is analyzed. In addition, company wise shale activities are provided for leading ten companies.

Read more here:

Hopewins said...

Ground truths about shale gas & oil...

Anonymous said...

Extracting shale oil and gas requires a lot of water and Pakistan has water shortage.

Riaz Haq said...

Anon: "Extracting shale oil and gas requires a lot of water and Pakistan has water shortage"

First, agriculture uses more than 95% of the water in Pakistan. Pakistan needs to use water in farming much more efficiently by making use of drip irrigation or sprinklers rather than flood irrigation common in Pakistan.

Second, the fact is that shale gas extraction uses a lot less water than other forms of energy production and the water can be reused in producing more gas.

Here's a comparison:

One MMBtu, or 1 million British thermal units, a standard measurement for the energy content of fuels, was produced from these energy sources using the following amounts of water:

Deep shale natural gas 0.60-5.80 gallons

Nuclear (uranium ready to use in a power plant) 8-14 gallons

Conventional oil 8-20 gallons

Synfuel-coal gasification 11-26 gallons

Coal (ready to use in a power plant) 13-32 gallons

Oil shale 22-56 gallons

Tar sands/oil sands 27-68 gallons

Fuel ethanol from corn 2,510-29,100 gallons

Biodiesel from soy 14,000-75,000 gallons

Argus said...

The KP Governor was given an update about plans to explore the area for oil and gas, that is all. The headline concluding "abundance" is wildly and typically incorrect.

Riaz Haq said...

Argus: "The KP Governor was given an update about plans to explore the area for oil and gas, that is all. The headline concluding "abundance" is wildly and typically incorrect."

I see it as a very encouraging sign.

The first step toward any major new discoveries of mineral resources is always a geological survey and estimate. It's this work that entices exploration companies to drill and prove.

Riaz Haq said...

Here's a report on an off-shore discovery by Pakistan Petroleum (PPL) in Sindh province:

Karachi’s Pakistan Petroleum has reported flow test success from a deeper reservoir at its Adam X-1 gas and condensate find onshore Pakistan.
The state player said that it had evaluated the potential of lower basal sands at a depth of 3450 metres at the Block 2568-13 probe over the past two months.

The Sanghar district, Sindh province well is to be put into production immediately after flowing 14.3 million cubic feet per day of gas and 125 barrels per day of condensate, the explorer said.

Pakistan Petroleum operates the licence on a 65% working interest with compatriot Mari Petroleum on 35%.

Niaz said...

Million dollar question is:

1. Do Pakistan gov’t or Pakistan companies have the technology and funds to commit to a fracking venture?
2. Are there any foreign company willing to commit huge funds in Pakistan to develop these resources?

Answer to the first question is a big ‘NO’. GOP has neither the funds nor horizontal technology expertise to undertake such a project.

Given the precarious law & order situation in Pakistan where TTP/Lej loving sections of Pakistan polity ensure that even the life of harmless cricketers and mountaineers is not safe; few foreign companies are willing to invest in Pakistan.

Who cares about 18 hours load shedding; all those TTP & Lej murderers will be rewarded with 72 houris in the afterlife.

Riaz Haq said...

Niaz: "Million dollar question is: 1. Do Pakistan gov’t or Pakistan companies have the technology and funds to commit to a fracking venture? 2. Are there any foreign company willing to commit huge funds in Pakistan to develop these resources?"

The history of the global energy industry tells us that with the right licensing terms and suitable security and political environment, oil and gas drilling can attract a lot of foreign technology and investments with lucrative returns. That's what Pak leadership should work on and money and tech will follow.

Riaz Haq said...

Here's a News report on rising oil production and declining gas production in Pakistan:

KARACHI: Pakistan’s oil production in the fiscal year ended June 30, 2013 saw sharpest growth in 22 years of 14 percent. However, gas production decreased by almost three percent.

“The country’s FY13 oil production grew by 14 percent to average 76,000 barrels per day, which is well above historical 10-year oil production at cumulative average growth rate of one percent,” Atif Zafar at JS Global said. “But, the same was largely overshadowed by gas shortages in the country since gas production shrank by three percent to 4,100 million metric cubic feet per day (mmcfd).”

The decline is the rampant since 1987 mainly owing to natural depletion of existing fields.Pakistan’s proven recoverable oil and gas reserves stand enough only for 13 and 18 years, respectively, he said. However, analysts expect upgrade of reserves in the upcoming reserve appraisal.

The Oil and Gas Development Company (OGDC) recorded the highest production gains – based on barrels of oil equivalent – (up by three percent), whereas production of Pakistan Petroleum Limited (PPL) and Pakistan Oilfields Limited (POL) fell four percent and nine percent, respectively.

Based on provisional numbers for the last quarter of the fiscal year, the country’s oil production is up by only one percent, while gas production decreased by seven percent.

During the quarter, oil production of POL increased by 13 percent and gas by three percent, while OGDC’s oil production went up by two percent and gas by nine percent. Additionally, PPL’s oil production scaled up by four percent, while gas output was down by nine percent in the last quarter.

“We expect further improvement in oil production by an estimated 11 percent in the current fiscal year. However, additional gas production will largely be offset by natural depletion,” Zafar said.

Riaz Haq said...

Pakistan's Sui Southern Gas Co (SSGC) signs first ever tight gas agreement with PPL and Polish Gas consortium for 20 million cubic feet of gas per day starting in 2013:

Pakistan joins the Tight Gas Club - A landmark achievement by SSGC
SSGC is now ready to receive its first gas delivery from Rehman Gas Field. The major scope of this project, Pakistan’s first ever Tight Gas Project, involved construction of 6”/8” dia x 52 Km pipelines that include flow lines and export pipeline. This project was conducted in one of the hardest terrains and under toughest climatic conditions where temperature soared to as high as 50oC. A maximum of 20 mmcfd will be injected in the SSGC’s system through the Field.
Other salient features of the project:
· Objective: This achievement is also in line with MD’s strategic objective of FY 2012-13
· Agreement: The project commenced after the agreement signed between SSGC and a consortium of Polish Oil and Gas Company and Pakistan Petroleum Ltd. (PPL) in November 2012.
· Main Departments involved in commissioning: Planning and Development, Projects and Construction, Legal, Finance, HSEQA and L&EM Departments.
· Tendering Process: SSGC participated in the competitive bidding process last year and won the pipeline project bid (Rs 235 million).
· Resources: The Company utilized in-house resources, engaging the manpower and equipments for a period of 6 months since SSGC had no major transmission project for construction during this time.
· The Project enriched SSGC’s portfolio as an enterprising company.

Riaz Haq said...

No source of energy is without risks, including wind. Here's an excerpt from a San Francisco Chronicle report:

The long hot summers of the San Joaquin Valley suck great tsunamis of cool coastal air through the Altamont Pass, producing winds so powerful that a person can lean nearly 45 degrees without falling down.

Such awesome force gave birth in the early 1980s to the world's largest collection of wind turbines, pioneers in what is now America's fastest-growing form of renewable energy and an increasingly important weapon in the battle against global warming.

But the Altamont Pass Wind Resource Area is also a symbol of the wind industry's biggest stain - the killings of thousands of birds, including majestic golden eagles, by turbines. The result has been a wrenching civil war among those who are otherwise united in the struggle to save the planet and its creatures.

It's been nearly a year since a controversial legal settlement was forged among wildlife groups, wind companies and Alameda County regulators. That agreement, opposed by some parties to the dispute, promised to reduce deaths of golden eagles and three other raptor species by 50 percent in three years and called for the shutdown or relocation of the 300 or so most lethal of the approximately 5,000 windmills at Altamont.

Although it does burn much cleaner than coal and oil, the process of extraction of shale gas in Pakistan, or anywhere else, is not without risks, particularly risks to the environment. In the United States, there have been many reports of ground water contamination from chemicals used to fracture rocks, as well as high levels of methane in water wells. In the absence of tight regulations and close monitoring, such pollution of ground water could spell disaster for humans and agriculture.

Given Pakistan's heavy dependence on natural gas for energy and as feedstock for industries such as fertilizer, fiber and plastics, it's important to pursue shale gas fields development under reasonably tight environmental regulations to minimize risks to the ground water resources.

Shale gas extraction uses a lot less water than other forms of energy production and the water can be reused in producing more gas.

Here's a comparison:

One MMBtu, or 1 million British thermal units, a standard measurement for the energy content of fuels, was produced from these energy sources using the following amounts of water:

Deep shale natural gas 0.60-5.80 gallons

Nuclear (uranium ready to use in a power plant) 8-14 gallons

Conventional oil 8-20 gallons

Synfuel-coal gasification 11-26 gallons

Coal (ready to use in a power plant) 13-32 gallons

Oil shale 22-56 gallons

Tar sands/oil sands 27-68 gallons

Fuel ethanol from corn 2,510-29,100 gallons

Biodiesel from soy 14,000-75,000 gallons

Riaz Haq said...

Here's an Upstream report on the start of tight gas production by Polish firm PGNiG in Pakistan:

Polish explorer PGNiG has commenced production in Pakistan for the first time, bringing two wells online at the Rehman field in southern Pakistan.
The Kirhtar licence area wells are producing on test at an expected rate of around 100 million cubic metres of gas per year.

The gas is being fed directly to the Pakistani transmission system, with the field’s entire output being sold to Pakistani authorities, the Warsaw-headquartered explorer said.

Test output is due to last 22 months, with total gas resources at the licence area estimated at around 12 billion cubic metres.

Situated in the western part of Sindh province, the Kirthar licence is operated by PGNiG on a 70% stake, with Pakistan Petroleum on 30%.

Pakistan is the explorer’s second international location for operated production after Norway.

Riaz Haq said...

Here's a Polish report on Pak gas production:

Poland’s gas monopolist PGNiG may sport over 20 bcm in natural gas reserves of its Pakistani licenses and for now suspended the process of selling the licenses, acting CEO Miroslaw Szkaluba told PAP Polish news agency.

"The potential reserves of the two areas may exceed 20 bcm," Szkaluba said.

PGNiG holds 70% in the Kirthar license with reserves of some 12 bcm, and it received prolongation of a neighboring license, where it will start exploration works at the turn of the year, the official said.

For now, the company suspended works on selling the licenses.

Test production works in the country will take 22 months. In the initial stage, PGNiG expects to produce 0.1 bcm of gas annually.

Riaz Haq said...

Here's a Reuters' report on tight gas revolution in China:

SULIGE, China (Reuters) - At the heart of the vast desert region of Inner Mongolia, half a dozen young engineers from PetroChina <0857.HK> watch huge, flat screens in a brightly lit central control office that oversees 5,000 wells at China's largest gas field.

Just a few years ago, two workers travelling in a truck would need three days to check conditions at 50 wells at the Sulige field, which spans 20,000 sq km (7,700 sq miles) in the middle of Maowusu, China's third-largest desert: now, the task can be done in just five minutes.

Remote Sulige, which means "uncooked meat" in Mongolian, is testament to China's success in developing its giant reserves of so-called "tight gas", part of a drive to dramatically boost consumption of cleaner burning natural gas to help replace dirty coal and costly oil imports.

Like the better-known shale gas revolution in the United States, tight gas is transforming China's gas production - accounting for a third of total output in 2012 -- and will form the backbone of the country's push to expand so-called "unconventional" gas production nearly seven-fold by 2030.

The speed and size of the boom has outstripped forecasts and has been led by local firms developing low-cost technology and techniques, already being rolled out by Chinese companies in similar gas fields outside of China.

Like shale gas, although less difficult to extract, tight gas is an unconventional deposit that needs special technology such as horizontal drilling or fracturing to free gas trapped in tiny cavities in rocks like sandstone.

Output of tight gas hit 30 billion cubic metres (bcm) in 2012 -- nearly a third of China's total gas output -- and is expected to rise to 100 bcm by 2030, leading an unconventional fuel boom ahead of shale or coal-seam gas.

"We found our own approach to develop tight gas," said Hu Wenrui, a former Petrochina vice president and a key architect behind developing the deposits. "With this, China's tight gas has entered the fast track."

Forecasts by the China Academy of Engineering (ACE) put 2020 output of tight gas at 80 bcm, more than a forecast 50 bcm of coalbed methane and 20 bcm of shale gas combined.

Despite the excitement over shale gas, of which China holds larger reserves than the United States, the world's top energy user has taken only baby steps to exploit the more complex deposits, drilling just 80 or so wells by the end of last year.

Its output of coal-seam gas continues to disappoint after two decades of development, reaching about 6.5 bcm in 2012.....

Riaz Haq said...

Here's an ET story on pricing of domestic shale gas in Pakistan:

Pakistan Petroleum Limited (PPL) and Italy’s Eni have calculated that the price of shale gas should be $14 per million British thermal units (mmbtu), which has been rejected by the government as too much for the country’s existing tariff regime to absorb, an official told The Express Tribune.
The price was determined on the basis of expenditure required to drill for hard-to-reach shale gas reservoirs following a rise in interest in tapping this potential on the back of reports that Pakistan has massive reserves.
“There has to be a steady transition from conventional gas to tight and then finally to shale gas,” said Moin Raza Khan, Deputy Managing Director of PPL and head of its exploration operation. “This has to be a slow process because of the economics involved in the operations.”

Almost all the 4,000 million cubic feet per day (mmcfd) of gas produced in Pakistan comes from conventional gas fields, which can be reached relatively easily. Tight gas is trapped in impermeable rocks whereas gas trapped in shale formation is called shale gas.
Average consumer gas price is around $4 per mmbtu, undermining the prospects for shale gas to be brought into the system at this stage, Khan said.
“One reason why the US produces shale gas in abundance is because of the economies of scale. We would have to do that to make it feasible and this can’t happen overnight,” he said.

So for the time being exploration firms including PPL are focusing on tight gas, for which the government has increased the price by 40% through a separate petroleum policy.
First tight gas flows entered the transmission and distribution system in June this year as production of 15 mmcfd started from Kirthar block, which is a joint venture between a Polish firm and PPL.
Sui dilemma
For more than 57 years, Sui gas field fuelled the economy, so much that natural gas became synonymous with Sui gas. And now it has depleted.
“If you ask me I think the gas pressure will sustain for another 10 to 12 years,” Khan said. “The pressure used to be 1,300 psi (pounds per square inch), which has come down to only 300 psi.”
To tackle that problem, the company regularly installs compressor plants on the wells to maintain the pressure. “We are considering installing equipment for 100 psi and even 50 psi.”
Offshore expedition
PPL along with its local and foreign partners plans to drill a well in offshore Block-G in the Indus, the world’s second largest delta after the Bay of Bengal.
“Having a discovery offshore is very important,” he said, referring to the successive past failures. “So far, 13 wells have been drilled in Indus. Gas was found only in one and that wasn’t commercially feasible to take out.”
Pakistan has a coastline spread over 1,990 km and sub-divided into Indus and Makran deltas. Indus delta alone is spread over 1.1 million square kilometres. Pakistan’s area covers over 240,000 sq km of this....

Sam said...

Read Page 4 Of This Report By Nepra

"Prognostic potential of total endowment of hydrocarbons has been estimated as 27 billion barrels of oil and 282 trillion cubic feet of gas."

Pakistan Offshore Hydrocarbon Prospective

. General Introduction of Pakistan Offshore: Offshore Pakistan which stretches over 200,000 Sq.kms can be divided into two major units: the Indus Offshore Basin and the Makran Offshore Basin. These two units are separated by the Murray Ridge and the Owen Fracture Zone which form a transition Zone/plate boundary between the two.

The Indus Basin covers the second largest fan in the world after the Bengal fan. The Indus Fan is located in Pakistan and Indian Coast between 160 to 24*. North latitude and 60* to 73* East longitude. It is about 1500 km in length (from the North until it present delta front in the Indian Ocean) and 960 Kms in width (from the India continental shelf to the East to the Owen shear zone to the West). At the thicker part in the basin, the fan is estimated to be about 10 kms, thick. The Indus Fan is cut in the south-eastern corner by a submarine canyon of the River Indus that is 2,900 Kms. long. Presently 14 exploration blocks are being held by E & P companies in offshore area of Pakistan. The details of exploratory wells drilled in Offshore Area are also provided in Table-2 below. Past petroleum exploration efforts in Indus Delta are limited to drilling of only 12 exploration wells. The details of past drilling efforts are indicative of the fact that Indus Basin is highly under explored. Of these wells, only one ie Pakean-1 tested 3.7 MMSFCD in a DST pointing towards presence of movable hydrocarbons in Indus Fan. Moreover Indus basin is analogous to other producing basins of the world in terms of geological setting such as Mississippi Delta, (Gulf of Mexico, USA ), Niger Delta (Nigeria), Mahakam Delta (Indonesia) Mackenzie Delta (Canada) and Gippslan Basin (Australia) etc.

2. Hydrocarbon Potential of Pakistan Offshore

2.1 Reservoir Rocks: With sparse well penetrations, little is known about the reservoir potential. In the upper section (mid Miocene and above) giant channel levee systems are seen on the seismic, which represent the canyon-channel system of the ancient Indus Fan and having degradational to aggradational behavior and seismic facies. The reason why these channels are so large is probably because of the high discharge from the Indus River and because of accommodation space being created by movement along the Murray fracture. High amplitude chaotic reflectors which could be good target for excellent quality sands. High Amplitude Reflection Packages (HARP) can also be seen at the base of the channel levee systems. In the Amazon delta these HARP's have been penetrated and are known to be high net to gross sheet sands. On seismic data, amalgamated channels with good sand development are quite evident. Low relief mounding is observed and the presence of amplitude anomalies points to the presence of channel and sheet sands. Mud diaper cored anticline particularly in the proximity of Murray Ridge are also seen on seismic data with multiple amplitude anomalies pointing towards good reservoir sand development in Indus Delta.

2.2 SEALS: Offshore shelf wells show that the Indus delta is mud rich and the large levee systems seen on seismic confirm this. Extensive quiet zones in Miocene sequence are interpreted to be thick blanket shales which are expected to provide an excellent seal.

Riaz Haq said...

Here's Wall Street Journal on India's shale gas production efforts:

India is hoping to unlock its shale gas reserves, which are spread across wide and difficult to reach terrain, by inviting investments from private companies.

The country is believed to have about 63 trillion cubic feet of recoverable shale gas reserves, more than 20 times the size of the country’s largest gas deposit Reliance Industries500325.BY -1.44%’ KG-D6 block in the Krishna-Godavari basin off the eastern coast.

That’s enough to run the country’s gas-fired power stations for at least 20 years at current consumption rates, according to industry analysts.

But experts say it may take years for the country to access and realize profits from the valuable natural resource because of a lack of infrastructure, opposition to raising gas prices and paucity of information about exactly where to find the gas.

Minister of Petroleum Veerappa Moily and his top aides have repeatedly promised that the government is on the verge of finalizing a policy on shale gas exploration.

But slow assessment of the size and accessibility of actual reserves and how to price the gas, have hindered progress towards developing a roadmap for shale gas extraction.

Shale gas is trapped deep below ground between rocky formations and is hard to extract. But recent technological advances have made it possible to extract. Oil companies inject chemically-treated water at high pressure into the ground that helps to release the gas from underground, a process known as hydraulic fracturing or fracking.


The extraction of domestic shale gas deposits will be critical to India’s aim of zero energy imports by 2030, according to another petroleum ministry official. The country currently imports 75% of its energy requirements.

But even if contracts are simplified and gas prices are freed from government control, there are other obstacles standing in the way of extraction.

India’s gas reserves belong to the government rather than private landowners as in the U.S. so private operators must obtain government contracts to begin exploration instead of dealing directly with a landlord.

India also needs to map out the reserves accurately. Preliminary findings show that they are spread out predominantly over eastern and western parts of the country mainly in the western state of Gujarat and eastern states including West Bengal. There are also some isolated deposits in central India.

Experts say the bulk of the reserves in eastern India lack the necessary network of pipelines to transport the gas–a task that many private operators are wary about undertaking.

“There are plans to have connecting pipelines and build a major highway gas pipeline,” said B.K Chaturvedi, member for energy in the government’s policy think tank, the Planning Commission.

But he added that it would take at least four to five years from any policy announcement to actual production of fuel from domestic shale gas reserves.

Riaz Haq said...

Dawn report on 8/28: Pakistan said to have large reserves of shale gas, oil

So the Pakistani media finally found out about it....more than two months after I blogged about it.

Riaz Haq said...

Here's a Marketwatch report on oil and gas find in Pakistan:

CALGARY, ALBERTA, Feb 18, 2014 (Marketwired via COMTEX) -- Jura Energy Corporation ("Jura") CA:JEC +18.37% today announced a gas and condensate discovery at the Ayesha-1 exploration well in the Badin IV South block.

The Ayesha-1 well was completed in the 'B' Sands of the Lower Goru Formation of Cretaceous age. During a short test on 32/64 inch choke, the well flowed gas with a heating value of approximately 1,000 Btu/Scf at a rate of 11.34 MMcf/d and a wellhead flowing pressure of 1,998 psi. The condensate to gas ratio was in the range of 10-12 bbl/MMcf with minimal water cut production. Detailed testing of Ayesha-1 will continue over the next few days.

Anticipated future production from the Ayesha-1 discovery is expected to be entitled to a gas price of US$6 per MMBtu under Pakistan s Petroleum (Exploration & Production) Policy, 2012.

Shahid Hameed, CEO of Jura, commented on the Ayesha-1 test results saying: "We are delighted with the successful test results. Given Ayesha-1's proximity to existing processing and pipeline infrastructure, this commercial discovery could be brought into production on a fast-track basis. Our Badar and Guddu fields are already in production and first gas production is anticipated from Zarghun South in the first half of 2014."

The drilling rig has now been released from Ayesha-1 and mobilized for the drilling of another exploration well, Haleema-1, in the Badin IV South block. The drilling of Haleema-1 is expected to commence in the first week of March 2014.

Jura holds a 27.5% working interest in the Badin IV South block, which is operated by Petroleum Exploration (Pvt) Limited.

Riaz Haq said...

Modi on petroleum exploration in Pakistan: Referring to the exploration scope in the region, he said Pakistan has started exploring the area across the border for gas and petroleum products.

"Look across the border in Pakistan, they have started massive work in gas and petroleum sector, why can't we?" he asked.

"It is the same region. There is immense scope for gas and petroleum here. I am sure we can definitely find it here as well. It can give new strength to our nation."

Addressing the youths, he said there will be opportunities in the exploration work in future and asked them to prepare themselves for it.

"We have started a petroleum university in Gujarat and this is for youngsters. I would urge the youth here to go on Internet and search about petroleum university. I invite you to make full use of it," he said.

Riaz Haq said...

Pakistan has sent samples of shale gas to the United States to determine the prospects of reserves of this untapped energy source following encouraging estimates given by the US Energy Information Administration (EIA), officials say.
According to the EIA assessment, Pakistan holds massive shale gas reserves estimated at 51 trillion cubic feet (tcf), close to the conventional gas reserves of 58 tcf.

At present, the government is conducting a study with the technical assistance of US Agency for International Development to prove the presence of huge shale gas deposits in the country.
Sources disclose that USAID has provided $1.8 million in technical assistance for undertaking the study. “Some samples have been sent to the US and research work will be completed in one year,” an official said, adding they were also looking for adopting US technology.
Washington is also imparting technical training to Pakistani officials and employees and engineers of public sector oil and gas companies.
The Ministry of Petroleum and Natural Resources has sent a summary to the Economic Coordination Committee (ECC) of the cabinet, seeking the go-ahead for initiating a pilot project to search and consume the shale gas potential. The move is aimed at gradually bridging the yawning gap between demand and supply of energy.
Shale gas is natural gas that is found trapped within shale formations. It has low permeability compared to conventional reserves, that’s why it does not come out easily and a specific amount of investment and pricing are required to encourage its exploitation.
At present, Pakistan is not producing shale gas and needs to undertake significant initial work to tap this energy resource.
The US, after the discovery of massive shale gas deposits there in recent years, has become a gas-exporting country. In future, reports say, it will experience a boom in shale oil production as well and will become the largest oil producer.
Officials point out that Pakistan will offer $12 per million British thermal units (mmbtu) to gas exploration and production companies under the pilot programme, a price that is close to the cost of gas to be imported from Iran under the Iran-Pakistan pipeline project.
“A policy framework has been prepared and its approval will be sought from the ECC in its upcoming meeting,” an official of the petroleum ministry told The Express Tribune.
According to the official, exploration companies have already found some traces of shale gas during the search for conventional gas as 10% to 12% of shale gas appears on upper faces of conventional gas.
Experts suggest that Pakistan has consumed around 40% of conventional gas reserves and shale gas is the most viable option to meet growing energy needs.
A study conducted by a group of exploration and production companies says the production of shale gas will be economical at about 80% of the price of Brent crude, but this will have to be brought down to 70%.
Apart from shale gas, the government is also planning to drill 400 wells in the next four years in an effort to enhance the country’s oil and gas production.
Though in the past one year new gas deposits had been found, total production of the country stood at almost the same level at four billion cubic feet per day because of depletion of reserves in old fields.
According to officials, the country has added 500 million cubic feet of gas per day (mmcfd) from new finds, but a quantity more than that has been depleted. Therefore, the impact of additional 500 mmcfd is not reflected in overall production.
However, oil output has risen to near 100,000 barrels per day compared to 74,000 barrels per day earlier.

Riaz Haq said...

Morse in Foreign Affairs magazine:

Despite its doubters and haters, the shale revolution in oil and gas production is here to stay. In the second half of this decade, moreover, it is likely to spread globally more quickly than most think. And all of that is, on balance, a good thing for the world.

The recent surge of U.S. oil and natural gas production has been nothing short of astonishing. For the past three years, the United States has been the world’s fastest-growing hydrocarbon producer, and the trend is not likely to stop anytime soon. U.S. natural gas production has risen by 25 percent since 2010, and the only reason it has temporarily stalled is that investments are required to facilitate further growth. Having already outstripped Russia as the world’s largest gas producer, by the end of the decade, the United States will become one of the world’s largest gas exporters, fundamentally changing pricing and trade patterns in global energy markets. U.S. oil production, meanwhile, has grown by 60 percent since 2008, climbing by three million barrels a day to more than eight million barrels a day. Within a couple of years, it will exceed its old record level of almost ten million barrels a day as the United States overtakes Russia and Saudi Arabia and becomes the world’s largest oil producer. And U.S. production of natural gas liquids, such as propane and butane, has already grown by one million barrels per day and should grow by another million soon.

What is unfolding in reaction is nothing less than a paradigm shift in thinking about hydrocarbons. A decade ago, there was a near-global consensus that U.S. (and, for that matter, non-OPEC) production was in inexorable decline. Today, most serious analysts are confident that it will continue to grow. The growth is occurring, to boot, at a time when U.S. oil consumption is falling. (Forget peak oil production; given a combination of efficiency gains, environmental concerns, and substitution by natural gas, what is foreseeable is peak oil demand.) And to cap things off, the costs of finding and producing oil and gas in shale and tight rock formations are steadily going down and will drop even more in the years to come.

The evidence from what has been happening is now overwhelming. Efficiency gains in the shale sector have been large and accelerating and are now hovering at around 25 percent per year, meaning that increases in capital expenditures are triggering even more potential production growth. It is clear that vast amounts of hydrocarbons have migrated from their original source rock and become trapped in shale and tight rock, and the extent of these rock formations, like the extent of the original source rock, is enormous -- containing resources far in excess of total global conventional proven oil reserves, which are 1.5 trillion barrels. And there are already signs that the technology involved in extracting these resources is transferable outside the United States, so that its international spread is inevitable.

In short, it now looks as though the first few decades of the twenty-first century will see an extension of the trend that has persisted for the past few millennia: the availability of plentiful energy at ever-lower cost and with ever-greater efficiency, enabling major advances in global economic growth.


The shale revolution has been very much a “made in America” phenomenon. In no other country can landowners also own mineral rights. In only a few other countries (such as Australia, Canada, and the United Kingdom) is there a tradition of an energy sector featuring many independent entrepreneurial companies, as opposed to a few major companies or national champions. And in still fewer countries are there capital markets able and willing to support financially risky exploration and production.

Riaz Haq said...

From Financial Times on shale production costs:

As oil prices have fallen, the cost of production from US shale has emerged as a critical question for investors.
In a downturn, higher-cost supply is most at risk, and the need for horizontal wells and hydraulic fracturing – “fracking” – in shale reserves means they are more expensive to develop than many oilfields in the Middle East.

If oil prices fall further, however, US production costs are likely to fall too, providing a safety valve to reduce the pressure on producers.
There is no single answer to the break-even price for shale developments: it varies from area to area and well to well.
Even with US crude prices of about $100 a barrel earlier in the year, the small and midsized exploration and production companies that led the US shale revolution were running large cash deficits.
If oil remains at its present level of roughly $82 per barrel, it will put back the point at which they will be able to cover their capital spending from their cash flows.
However, their costs have already fallen sharply, and could fall further. The median North American shale development needs a US crude price of $57 a barrel to break even today, compared with $70 a barrel in the summer of last year, according to IHS, the research company.
EOG Resources, one of the most successful of the shale oil producers, cut its cost per well in the Leonard shale on the border of Texas and New Mexico from $6.9m in 2011 to $5m this year, while raising average production from each well.

Melissa Stark, a managing director at Accenture, the consultancy, says the industry still has a lot of room for improvement.
With more than 18,000 horizontal wells set to be drilled in the US this year, she argues that improving the “manufacturing model” of repeated similar projects could deliver large savings.
Accenture believes the average cost of a US shale well could be cut by up to 40 per cent by better management of factors such as planning, logistics, and relationships with suppliers.
David Vaucher of IHS says that if prices remain at around today’s levels, rates charged to oil producers for fracking and other services are likely to remain about where they are.

Niaz said...

During the discussions with various experts from Chin as well as the US during the APPEC (Asia Pacific Petroleum Conference) held at Singapore end Sept/early October this year; oil and gas price was the hot topic. It was generally agreed that $80 per bbl. oil is the reference point. If the price falls below it, additional investment in Fracking & Shale development would dry out.

On the other hand, large Middle Eastern producers such as Saudi Arabia are worried about changing geo-political situation and losing their strategic importance to the US. There are no plans for an emergency meeting to halt the recent downward slide in the international oil price. OPEC countries production cost is considered below $20 per bbl and $80 per bbl high enough price for Saudi Arabia, Kuwait, UAE & Qatar.

Understand this morning Brent traded as low as $84 in the Far East market with OPEC basket of crudes at close to $82 per bbl. In my humble opinion oil prices are likely to stay at current levels at least until next OPEC meeting schedule for Nov 27, 2014.

Indirectly this scenario would affect tight/shale gas drilling in Pakistan;foreign investors may consider it uneconomic. It should however direct benefit Pakistan in short term by reducing annual import bill by about 20%.

Riaz Haq said...

Niaz: "this scenario would affect tight/shale gas drilling in Pakistan;foreign investors may consider it uneconomic."

The shale oil and gas production costs are also declining at least as fast or faster than crude oil prices.

At current costs, the break-even for shale oil is $57 a barrel.

Riaz Haq said...

Uncertainty surrounds the future of a world-class gold mine in Pakistan due to poor handling of the project by regional authorities.

Reko Diq is a copper and gold mine in Chagai district of Balochistan province with a value up to $500bn. It holds about 5.9 billion tonnes of ore, making it the world’s fifth largest deposit of gold and copper.

But the huge project has ground to a halt over a dispute between the provincial government and the miners.

Tethyan Copper Company (TCC) – a joint venture of Barrick Gold of Canada and Antofagasta of Chile – had been awarded a licence for exploration in the Reko Diq area in 2006. In 2011, TCC’s application for a mining lease for the project was rejected by the Balochistan government of then-chief minister Aslam Raisani, which decided to run the project on its own.

TCC took the case to the international arbitration court claiming damages because it had invested more than $500 million in exploration and feasibility studies.

“There is potential … for multiple mine developments over the next few decades. By refusing a mining licence without good grounds, it’s sending quite a negative signal to the exploration/mining community,” said Tim Livesey, the chief executive of TCC, in 2012.

The rejection of a mining licence to the company after an exploration permit had been granted was an unusual decision by the government. Mr Raisani abruptly closed off communication with the company and even refused to meet its executives.

Mr Raisani rejected the TCC bid in the name of protecting the legitimate interest of Balochistan, but did his decision really help the least developed province and its people?
Metallurgical Corporation of China (MCC) came with a counter proposal for a mining lease for Reko Diq and offered Balochistan a larger share in income and royalty.

In 2002, MCC had acquired a lease the Saindak copper and gold project in the same district as Chagai, which expired in 2012. If the Raisani government was serious in its desire to develop deposits using local firms, why did it not oppose the five-year extension in the lease period of the Saindak project?

The Reko Diq project became controversial after news stories alleged that the Reko Diq gold mines were being secretly sold to foreign firms for peanuts.

The dispute between TCC and Balochistan began after the resignation of Mr Musharraf in 2008. Under his administration, TCC was awarded the project with mining rights and it signed a joint-venture agreement with Balochistan holding 25 per cent interest in the project. But in December 2009, Balochistan said it was cancelling the TCC deal.

That triggered a blame game, with each side accusing the other of violating mineral rules. In January 2013, former chief justice of the supreme court Iftikhar Chaudhry declared the Reko Diq contract between the Balochistan and TCC void.

Arbitration proceedings have further delayed the mine’s development, which has not been worked since 1993 when BHP Billiton signed a deal with Balochistan. While BHP had an exploration deal, it did no practical work and sold its 75 per cent interest to TCC in 2000. In 2006, TCC was taken over by Antofagasta and Barrick Gold.

TCC deserves credit for the discovery of the huge Reko Diq deposits. The company was willing to make an investment of $5bn over five years. It could have been the biggest foreign-financed project in the country’s history. But the short-sighted policy of the government meant this potential game changer never got off the ground.

What has been the outcome of the dispute so far? The country has missed a huge foreign investment. It has closed the door on technology transfer in mining into Pakistan and discouraged foreign firms eyeing up its mineral deposits.

Riaz Haq said...

Steep drop in oil and gas prices is depressing investment in shale and other alternatives.

Chevron just abandoned shale exploration in Poland.

Riaz Haq said...

#Pakistan confirms it has 105 trillion cubic ft #shale gas, 58 billion barrels of shale oil reserves #energy

Pakistan has confirmed recoverable reserves of around 200 trillion cubic feet (TCF) of natural gas and around 58 billion barrels of oil in its shale structure — many times larger than existing conventional gas reserves of around 20 TCF and 385 million barrels of oil.

This was stated by Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi at a press conference held here on Thursday to explain main findings of a recently concluded Shale Gas Study based on actual data of existing wells.

“The conclusion (of the study) is that Pakistan has huge potential of shale gas and oil which is much bigger than previous estimates of the United States Energy Information Administration (USEIA) and technology is available at home to produce this resource,” he said.

Also read: Oil and gas reserves found in Mianwali

Mr Abbasi said the country had a massive potential of 10,159 TCF shale gas and 2.3tr barrels of oil. He said the USEIA had reported in April 2011 the presence of 206 TCF shale gas in lower Indus Basin out of which 51 TCF was termed technically recoverable.

However, in June 2013 the USEIA revised the shale gas resource in Pakistan at 586 TCF in place out of which 105 TCF was tipped as risked technically recoverable and also included 9.1bn barrels of shale oil risked technically recoverable out of 227bn barrels shale oil in place.

He said a shale gas study initiated in January 2014 with the support of USAID had been completed. It proved that Pakistan had 10,159 TCF of shale gas resource and 2,323bn barrels of shale oil.

He said the findings were reached when recoverable data of 1,611 wells were collected and shale formation of 1,312 wells through drill was examined. The study covered lower and middle Indus Basin, geographically spread over Sindh, southern Punjab and eastern Balochistan. He said 70 per cent of wells data were used to develop the study.

The minister said the samples were sent to New Tech Laboratory in Houston to verify shale gas and oil resource in place. The study confirmed that Pakistan had the potential of shale gas and oil which was more than expectations.

He said Pakistan had the technology for exploring conventional oil and gas that could be used for exploiting shale oil and gas. However, the country requires more technology for exploiting shale oil and gas resource on a larger scale. He said that real challenges were environmental issues, availability of water and higher cost of drilling. He said one well required 3-8m barrels of water.

Shale gas will cost $10 per Million British Thermal Unit. “We have assigned OGDCL and PPL to explore shale gas and oil from one well to determine cost of extracting them.”

Responding to a question, Mr Abbasi said the natural gas would be available only for domestic consumers in Punjab and even they would not get it between 10pm and 5am. The demand of gas in domestic sector in Punjab is about 950mmcfd, but supplies will be around 650 mmcfd and the difference would need to be met through pressure management.

He said the power plants and fertiliser units would be run on LNG. “CNG sector may also get LNG if supply is available,” he said, adding that captive power plants would also be switched to LNG.

In reply to another question, he said a transparent process had been followed in awarding LNG contract and all required information and record were provided to the National Accountability Bureau. “I have been engaged personally in process of LNG and, therefore, take full responsibility and am available for any questioning or accountability,” he said.

He said that a summary had also been moved to the Council of Common Interests to approve regulation of LPG prices to provide relief to consumers but the CCI had not met for 10 months.

Riaz Haq said...

#Pakistan has 10,159 trillion cubic feet of #shale gas & 3.2 trillion barrels of shale oil reserves: #USAID #energy …

Pakistan has massive deposits of 10,159 trillion cubic feet (tcf) of shale gas and 2.3 trillion barrels of oil – estimates that are several times higher than figures given by the US Energy Information Administration (EIA), reveals a study conducted with the help of US Agency for International Development (USAID).

EIA had reported in April 2011 that 206 tcf of shale gas was present in the lower Indus Basin, of which 51 tcf were technically recoverable.

However, in June 2013, EIA revised the estimate upwards to 586 tcf, of which 105 tcf were tipped as technically recoverable. Apart from gas, EIA also saw the presence of 9.1 billion barrels of shale oil that were technically recoverable out of the estimated deposits of 227 billion barrels.

Speaking at a press conference, Petroleum and Natural Resources Minister Shahid Khaqan Abbasi said the study was undertaken with the support of USAID in January 2014, and was completed in November this year.

He said the study confirmed that Pakistan had 10,159 tcf of shale gas and 2,323 billion barrels of oil reserves.

“Risked technically recoverable resource is 95 trillion cubic feet of shale gas and 14 billion barrels of shale oil,” Abbasi said, adding the data of 1,611 wells had been collected and shale formation of 1,312 wells was done through drilling.

He said 70% of data was used to develop the study and samples were sent to the New Tech laboratory in Houston, US for assessment. “Pakistan has the potential to produce shale gas and oil, which is more than expectations,” he remarked.

Abbasi insisted that the technology in Pakistan for exploring conventional oil and gas deposits could also be used for extracting shale reserves. Still, more technology was required for producing shale oil and gas on a large scale.

He cited environmental issues, provision of water and high cost of drilling as the real challenges. A well requires 3 to 8 million barrels of water.

“We have water but the real issue is its disposal,” he said, adding shale gas would cost $10 per million British thermal units. However, the cost will come down with the increase in recovery of untapped deposits.

He said the world was exploring shale gas and oil and Pakistan also wanted to harness that potential. “We have asked OGDC (Oil and Gas Development Company) and PPL (Pakistan Petroleum Limited) to extract shale gas and oil from a well in order to determine its cost.”

A policy for shale deposits will be formulated after the cost of drilling is determined.

According to Abbasi, Pakistan has 20 trillion cubic feet of conventional gas and 385 million barrels of oil. “Gas is enough to meet the needs for 15 years at the existing pace of production,” he said.

Adviser to Ministry of Petroleum Zaid Muzaffar revealed that OGDC was working on one conventional gas well in a bid to find shale gas and oil. “We hope it will get results in two to three months.”

A well needs $2 to $3 million of additional cost to reach the shale reserves.

Gas supply in winter

Abbasi said gas would be available in Punjab to domestic consumers only and liquefied natural gas (LNG) would be consumed to run power and fertiliser plants.

Compressed natural gas (CNG) stations may get LNG if it was available and captive power plants would also be switched to this fuel, he said.

The minister stressed that the petroleum ministry had followed a transparent process in the award of LNG contract. It has provided all information to the National Accountability Bureau, which has asked for a presentation.

He revealed that the ministry had sent a summary to the Economic Coordination Committee for deregulating oil prices, but it was turned down. “We are looking at the petroleum situation again to assess whether it should be deregulated or not.”

Riaz Haq said...

Drilling of first #shale oil& gas wells starts in #Sindh, #Pakistan: Minister Abbasi | Business Recorder …

The state-owned Exploration and Production (E&P) companies; Pakistan Petroleum Limited (PPL) and Oil and Gas Development Company Limited (OGDCL), have started drilling of country''s first ever shale oil/gas well in Sindh. This was stated by Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi, who was flanked by State Minister for Petroleum Jam Kamal Khan and Advisor Petroleum Ministry Zahid Muzafar, while addressing a press conference here ion Thursday.

He said that in a new study undertaken by Director General Petroleum Concession (DGPC) with financial support from United States Agency for International Development (USAID) the shale gas revised in place resources of the country stand at 10,159 Trillion Cubic Feet (TCF) against previous estimated resources of 586 TCF. The minister said that out of this an estimated 200 TCF of shale gas resources are recoverable against 105 TCF of previous study.

Advisor Petroleum Ministry Zahid Muzafar, who is also Chairman Board of Directors OGDCL, in response to a question on the completion of first shale oil/gas well of the country said that it would be completed within four to five months and after the completion of first well the government will be in a position to determine wellhead price for shale gas/oil. He added that it would be around $10 per Million British Thermal Unit and on the basis of the pilot project the government will devise shale oil/gas policy to formally invite the local as well as international E&P companies to invest in the sector. Abbasi said that the new study had put the shale oil resources at 2,323 Billions of Stock Tank Barrels (BSTB) of which technically recoverable resources were 58 BSTB and risked technically recoverable resources estimated at 14 BSTB.


Talking to reporters on the occasion DGPC Saeedullah Shah said that the US Energy Information Administration (USEIA) in April 2011 reported presence of 206 TCF Shale Gas in Place Resource in Lower Indus Basin out of which 51 TCF were technically recoverable. However, in June 2013, USEIA revised Shale Gas resource in Pakistan as 586 TCF in place out of which 105 TCF were tipped as risked technically recoverable and also included 9.1 Billion Barrel Shale Oil risked technically recoverable resource out of 227 Billion Barrel Shale Oil in place.

The DGPC added that to get authenticate Shale Gas Resources in the country, Shale Gas Study with financial support from USAID was initiated in January 2014. The objectives of the study were to (i) validate Shale Gas Resource estimate of USEIA, (ii) assess availability of required technology and infrastructure for Shale Gas operations and (iii) formulate guidelines for Shale Gas Policy. The study was completed in November 2015 with a total cost of $2.2 millions. The study covered lower and middle Indus basin which geographically spread over Sindh and southern part of Punjab and eastern part of Balochistan province. Total area under the study was 271,700 km, which constitutes 33 percent of total sedimentary area of Pakistan. Under the study, detailed analysis of 124 wells were carried out including laboratory analysis on Shale Cores and Cuttings in USA. The study has confirmed presence of substantial Shale Gas and Shale Oil as under:

In place resource: Free gas (TCF), 3,778, adsorbed gas (TCF), 6,381Total gas (TCF), 10,159 and Oil (BSTB), 2,323 of which technically recoverable resource include free gas 188 TCF and Oil 58 BSTB. Risked technically recoverable resources are free gas 95 TCF and oil 14 BSTB.

Riaz Haq said...

#Pakistan’s discoveries add 50 million cubic ft per day (mmcfd) of #gas, 2,359 barrels per day (bpd) of #oil levels.

Pakistan has made the highest number of oil and gas discoveries in the current month as exploration companies found fresh hydrocarbon deposits in six wells that will add 50.1 million cubic feet per day (mmcfd) of gas and 2,359 barrels per day (bpd) of oil to the existing production levels.

Of these, major discoveries have been made in Sindh that already has a big share in total gas output in the country.

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Petroleum and Natural Resources Minister Shahid Khaqan Abbasi, while speaking during a meeting of the National Assembly Standing Committee on Petroleum and Natural Resources chaired by Bilal Ahmed Virk on Tuesday, said four discoveries were made in Sindh and the remaining two in Khyber-Pakhtunkhwa.

Of these, Oil and Gas Development Company made two finds, MOL Pakistan two and Petroleum Exploration Limited and United Energy Pakistan one each. The discoveries have shown presence of 31.6 mmcfd of gas and 339 bpd of crude oil in Sindh and 18.5 mmcfd of gas and 2,020 bpd of oil in K-P.

Sui Northern Gas Pipelines Limited (SNGPL) Managing Director Amjad Latif warned that the country’s gas reserves were depleting and no gas was available for the domestic consumers in Punjab. He pointed out that the purchasing cost of gas for domestic consumers stood at Rs510 per million British thermal units (mmbtu) but the consumers coming under the first slab were receiving it at Rs110 per mmbtu.

Eighty-five per cent of domestic consumers were paying less than 50% of the cost of gas and the industrial and commercial consumers were cross-subsiding the domestic consumers, he said.

However, now industrial and commercial consumers were being provided imported liquefied natural gas (LNG), so the burden of cross-subsidy had been shifted to SNGPL that was feeling the strain on its finances.

Though the gas production was declining, Latif told the committee that the company would lay pipelines over 8,000 km in the current year. At present, 1.5 million applications for new gas connections are awaiting approval of the company.

The country was facing gas shortages as politicians were using it as a tool to win elections.

During the meeting, National Assembly member Mian Tariq Mehmood, who belonged to the ruling PML-N, alleged that SNGPL had provided 100 gas meters in his constituency to please his political rival Imtiaz Safdar Warraich, though his requests for new meters were turned down repeatedly.

He insisted that the provision of gas meters to his opponent had damaged his political image. NA Standing Committee Chairman Bilal Ahmed Virk accused Director General Petroleum Concession Saeedullah Shah of not responding to the committee for the last two years.

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Describing Shah’s attitude as non-sense, he said he was not cooperating with the committee and sought the record of past meetings to show response of the director general of petroleum concession.

The committee also took up for review the issuance of licences for liquefied petroleum gas (LPG) stations to the defaulters that were previously running CNG stations.

It recommended that rules of Oil and Gas Regulatory Authority (Ogra) should be amended to ensure the clearance of outstanding bills of SNGPL, Water and Power Development Authority and banks before issuing licences for setting up LPG stations.

Riaz Haq said...

A review of Pakistani shales for shale gas exploration and comparison to North American shale plays
Author links open overlay panel Ghulam Mohyuddin Sohail a, Ahmed E. Radwan b, Mohamed Mahmoud c

Recent advancements in technologies to produce natural gas from shales at economic rates has revealed new horizons for hydrocarbon exploration and development worldwide. The importance of shale oil and gas has aroused worldwide interest after the great success of production in North America. In this study, different marine source rocks of Pakistan are evaluated for their shale gas potential using analogs selected from various North American shales for which data have been published. Pakistani formations reviewed are the Datta (shaly sandstone), Hangu (sandy shale), Patala (sandy shale), Ranikot (shaly sandstone), Sembar (sandy shale) and Lower Goru (shaly sandstone) formations, all of which are known source rocks in the Indus Basin. Available geological data of twenty-six wells (e.g., geological age, depositional environment, lithology and thickness), geochemical data (e.g., total organic carbon (TOC), vitrinite reflectance (Ro), rock pyrolysis analysis and maturity), petrophysical data (e.g., porosity and permeability) and dynamic elastic parameters estimated from logs (Young’s modulus and Poisson’s ratio) have been investigated. According to this study, the Pakistani shales are explicitly correlated with the most active shale gas plays of North America. The burial depths or geological position of the Pakistani shales are generally comparable to or slightly higher than the North American shales based on the available data. The thicknesses of the Pakistani (except for the Sembar shale) and North American shales fall in similar ranges. In terms of mineralogical composition, all of the Pakistani shales except the Ranikot and Hangu shales have quartz contents in the 40% to 50% range (approximately), which is similar to most of the North American shales. The high maximum TOC of the Hangu and Sembar shales (10%) is comparable to the New Albany, Antrim and Duvernay shales. The maximum TOC values for the Ranikot (3%), Lower Goru (1.5%) and Datta (2%) shales are lower than all North American shales. The TOC of Patal Shale (
5%–10%) is comparable to Fayetteville and Eagle Ford shales. The geological and geochemical parameters of all the Pakistani shales reviewed in this work are promising regarding their shale gas prospects. However, geomechanical data are required before conclusions on these shales’ economic production can be made with confidence.


The exploitation of shale gas reservoirs may enhance gas production and reduce the severity of the ongoing energy crisis. The main challenge in Pakistan is to evaluate the shales using limited data and samples. That is why only a few companies are working on shale gas reservoirs in Pakistan now. The researchers need to assess and rank prospective Pakistani shales to entice companies to consider shale gas development. The geological characterization of Pakistani shales has been investigated by several authors (e.g., Warwick et al., 1995, Kazmi and Abbasi, 2008, Ahmad et al., 2012, Hakro and Baig, 2013, Jalees, 2014), but detailed work is required on geochemical, petrophysical and geomechanical characterization for assessing the actual potential of shales in Pakistan (Abbasi et al., 2014).

StreamNexus said...

Pakistan's Sui Southern Gas Co (SSGC) has inked its inaugural tight gas agreement with PPL and the Polish Gas consortium for the supply of 20 million cubic feet of gas per day commencing in 2013:

A Historic Milestone for SSGC - Pakistan Joins the Tight Gas Club
SSGC is poised to receive its initial gas shipment from the Rehman Gas Field. The primary focus of this endeavor, Pakistan's maiden Tight Gas Project, entailed the construction of 6”/8” diameter x 52 km pipelines, encompassing flow lines and an export pipeline. Executed in one of the most challenging terrains and under the harshest climatic conditions, with temperatures soaring to as high as 50°C, the project marks a significant achievement. A maximum of 20 million cubic feet per day (mmcfd) will be introduced into SSGC's system through the Field.