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

65 comments:

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 Junior 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 Junior 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.


http://www.riazhaq.com/2009/12/can-throrium-energy-save-planet-earth.html

HopeWins Junior 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 Junior 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: http://www.sacbee.com/2013/06/18/5505941/asia-pacific-shale-gas-market.html

Riaz Haq said...

Here's a Fiber2fashion report on Pak's rising exports in May, 2013:

Riding on the back of marginal rise in demand from the US and European markets, textile and clothing exports from Pakistan grew by 5.3 percent to US$ 1.187 million in May this year, as compared to US$ 1.128 million in May 2012, statistics released by the Pakistan Bureau of Statistics (PBS) show.

The items that positively contributed to the export growth during the period include, cotton yarn whose exports grew by 11.89 percent year-on-year, cotton cloth by 5.8 percent, cotton carded or combed by 177.27 percent, yarn other than cotton yarn by 46.44 percent, knitwear by 2.07 percent, bedwear by 14.04 percent, towels by 7.95 percent, readymade garments by 22.67 percent and other textile material by 6.48 percent.

On the negative side, raw cotton exports plummeted by 66.35 percent year-on-year, art, silk and synthetic textile by 30.29 percent and made-up articles excluding towels and bedwear by 0.43 percent.

During the first 11 months of the ongoing fiscal year that began on July 1, 2012, Pakistan exported US$ 11.93 billion worth of clothing and textile items, which is 6 percent higher than exports worth US$ 11.26 billion achieved during corresponding period of previous fiscal, the data shows.

According to the data, cotton yarn exports surged by 24.86 percent year-on-year during the 11-month period, cotton cloth by 10.72 percent, readymade garments by 12.58 percent, yarn other than cotton yarn by 14.87 percent, knitwear by 2.41 percent, bedwear by 2.14 percent, towels by 15.52 percent and other textile materials by 27.50 percent.

However, exports of raw cotton plummeted by 68.05 percent year-on-year during July-May 2012-13, cotton carded or combed by 48.31 percent and art, silk and synthetic textiles by 27.10 percent.

According to experts, the improved power supply allowed yarn and fabric producers to fully utilize their production capacities, resulting in enhanced export of several items, including towels and bedwear.


http://www.fibre2fashion.com/news/textile-news/newsdetails.aspx?news_id=147646

HopeWins Junior said...

Ground truths about shale gas & oil...

http://alturl.com/e6d2t

Riaz Haq said...

Here's an ET report on a partnership for off-shore drilling for oil in Pakistan:

State-run Pakistan Petroleum Limited (PPL) and Singapore-based oil and gas company Orion Energy are likely to form a joint venture for offshore drilling in Pakistan.
Orion Energy, an independent oil and gas company headquartered in Singapore and with offices in London, is currently exploring scores of opportunities in Latin America.
According to sources, Orion had expressed interest in investing in Pakistan at the Pakistan Exploration Bidding Round 2012, held in London in December 2012 by the Pakistan Peoples Party-led coalition government.

On the sidelines of the event, Orion Energy Director David M Thomas, and his lawyer Nadim Khan, met the PPL managing director. The interaction was followed by another meeting between representatives of PPL and Orion, chaired by the director general of petroleum concessions.
In the Petroleum Policy 2012, the government had increased the gas price for Offshore Shallow Zone to $7 per million British thermal units (mmbtu), for Offshore Deep Zone to $8 per mmbtu and for Offshore Ultra Deep Zone to $9 per mmbtu. A bonanza of $1 per mmbtu will be given to exploration companies for the first three offshore discoveries under the policy.
Orion Energy had expressed interest in exploring offshore areas in Pakistan in partnership with PPL because of the latter’s good reputation and extensive experience in exploration and production of gas.
Following extensive technical discussions and encouraging feedback from PPL, the two companies agreed to initially undertake a joint study to evaluate prospects of offshore drilling and identify prospective areas for comprehensive exploration work.
Orion Energy had also expressed a desire to come to Pakistan for technical discussions with PPL on offshore exploration and on matters pertaining to forming a joint venture to carry out the joint study. Both sides had also finalised a joint study agreement, which had been ready to be signed by officials.
However, the visit was delayed due to general elections in Pakistan. It was only later, in the first week of June, that an Orion team reached here.
Technical staff from Orion and PPL will undertake the study, based on the geological data available with the two companies and the directorate general of petroleum concessions. The study will be completed in about four months, and its main objective will be to identify potential offshore areas for detailed evaluation through an exploration work programme and the financial obligations that will entail.


http://tribune.com.pk/story/565694/exploration-and-production-ppl-orion-may-tie-up-for-offshore-drilling-in-pakistan/

Riaz Haq said...

Here's an OilPrice editorial on oil and gas potential in FATA:

Pakistan’s Tribal Areas (FATA) and Frontier Regions (FR) are believed to have massive reserves of oil and natural gas—which Pakistani officials have suddenly become very keen to demonstrate. But this is a highly restive, war-torn area where one right move could make all the difference, and one wrong move could ignite a conflict with irreversible consequences.

For now, the area remains unexplored and it was only in 2008 when Pakistani geologists began to study the area in earnest, with the support of the local authorities in the Federally Administered Tribal Areas (Fata) and the Frontier Region (FR). The results of this research were collected, processed and digitized in June 2012. The geologists discovered seven new oil and gas seepages during the mapping. The geologists also claim that 11 oil and gas exploration companies have already reserved 16 blocks in Fata.

The potential:

• Pakistani geologists say Fata in particular is poised to become a “new oil state” whose production could rival Dubai’s in only five years
• The FR is bursting at the seams with gas, so they say

Here’s what the interest looks like so far:

• 17 companies have initiated operations in Fata/FR (in Khyber, Orakzai, North and South Waziristan, Peshawar, Kohat, Bannu, Tank and DI Khan)
• Tullow has been active in Pakistan since 1991,…


http://oilprice.com/Energy/Crude-Oil/Tapping-into-Pakistans-Massive-Oil-and-Gas-Reserves.html

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

http://www.greeningofoil.com/post/Deep-shale-gas-drilling-uses-least-amount-of-water.aspx

Riaz Haq said...

Here's an Express Tribune piece on oil and gas prospects in FATA:

The Federally Administered Tribal Areas (Fata) and Frontier Regions (FR) have enormous reserves of minerals, oil and natural gas that can augment economic activity in the war-torn areas, a research project concluded.
Talking to The Express Tribune ‘Source Rock Mapping and Investigation of Hydrocarbon Potential (SRMIHP)’ Project Coordinator Dr Fazal Rabi Khan said that exploration and excavation of oil and gas will introduce a new era of development and prosperity in the tribal areas.
“There can be many job opportunities created for people in the tribal belt if mineral exploration and extraction is pursued properly,” said Khan, who is also the chairman of the Geology Department in Abdul Wali Khan University Mardan (Palosa Campus).
The project was launched in 2008 under an agreement between the Fata Development Authority and National Centre of Excellence in Geology University of Peshawar. The project, which was completed at an estimated cost Rs40 million, was completed in June 2012.
Khan said that their objectives include identifying hydrocarbon generating rocks and its distribution in the region, preparing a geo-database regarding hydrocarbon potential and generating a systematic data to attract oil and gas companies for exploration.

The project has successfully collected, processed and digitised the data as a result of which, 80% of the project area has been mapped digitally. “This mapping has led to the discovery of seven new oil and gas seepages.”
He added that 11 oil and gas exploration companies have reserved 16 blocks in Fata, which go across from FR Peshawar and Kohat to Khyber, Orakzai, Bannu, Tank and up to North and South Waziristan.

He said that recently 17 oil and gas exploration companies initiated their operations in Khyber, Orakzai, North and South Waziristan agencies as well as in FR Peshawar, Kohat, Bannu, Tank and DI Khan.
Khan said that Mari Gas Company, HYCARBEX Inc, Oil and Gas Development Company, Tullow, Saif Energy, MOL Pakistan Oil and Gas, Orient Petroleum International, Pakistan Petroleum, ZHEN, ZAVER and others are currently working in Fata.
Oil and Gas Development Company (OGDC) will start drilling in these areas for the exploration of oil and gas reservoirs. The chairman said that the foreign oil company, Tullow, has obtained a licence for the exploration of oil and gas in North Waziristan Agency and Bannu, while MOL has shown interest in Khyber Agency, Kohat and Peshawar.
“Although law and order problems can become a hindrance, the project can be managed considering its importance,” he added.....


http://tribune.com.pk/story/484440/new-hope-springs-fata-fr-regions-abundant-in-oil-gas-says-report/

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 are details of PPL-Orion off-shore drilling deal in Pakistan:

Pakistan Petroleum Limited (PPL) and Orion Energy have signed an agreement for undertaking a joint study on the prospects of offshore exploration and will invest millions of dollars in drilling and set up a power plant that will receive gas from Kandhkot gas field.
PPL Managing Director and Chief Executive Officer Asim Murtaza and Orion Energy CEO and Director David M Thomas signed documents here on Friday.
British High Commissioner to Pakistan Adam Thomson and Pakistan Britain Trade and Investment Forum Executive Director Nadim Khan were also present on the occasion.
PPL and Orion Energy, headquartered in Singapore with a representative office in the UK, have planned to conduct the study in Indus and Makran offshore areas to determine the hydrocarbon potential there.

They will constitute different teams and earmark resources for the study, which is expected to take around four months. Following the identification of prospective areas, further exploration may get under way.
Later, technological partners may be brought in for state-of-the-art data acquisition, processing and identification of potential structures and reservoirs. Subsequent to the study, further exploration and production may require investments of around $100 million.
According to a statement, they will also form a special purpose company for establishing a 20 to 25-megawatt power plant and the capacity will be enhanced to 250MW.
In his welcome address, British High Commissioner Adam Thomson said, “Today’s signing is another step towards the UK and Pakistan’s ambitious, joint trade and investment targets. This is a clear signal from UK companies of their wish to do business in Pakistan with Pakistani partners in the energy sector.”
He said investment by any UK company in Pakistan’s energy sector had great importance to the British government. “Two years ago, the prime minister of Pakistan and the British premier mutually agreed to bring the volume of investment and trade to around $2.5 billion by 2015,” he said.
Thomson was of the view that both the countries were following the right track of cooperation and they could do and should exceed the set investment target because both were natural business partners and were already working together in almost every sector of the economy.
In Europe, he said, British companies were leading in supplying energy technology, both in traditional and alternative energy.
Talking briefly about his company, PPL MD Asim Murtaza said PPL was a frontline player in Pakistan’s energy sector with 71% government shareholding in the company. It produces 186,000 barrels of oil per day and covers 24% of energy needs of the country.
According to Murtaza, so far 17 offshore exploration attempts have failed, discouraging exploration companies, but the PPL-Orion initiative has revived hopes.
About exploration work in Makran region, he said geology of the region was very complex, requiring the use of state-of-the-art technology, which Orion Energy has. At a later stage, exploration activities in Makran will be extended to Indus Delta.
Murtaza said Kandhkot gas field could supply 200 million cubic feet per day (mmcfd) of gas, but Guddu power plant was receiving only 100 mmcfd.


http://tribune.com.pk/story/569800/joint-venture-ppl-orion-energy-to-invest-100m-in-offshore-drilling/

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%.


http://www.upstreamonline.com/live/article1331313.ece

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%.


http://www.upstreamonline.com/live/article1331313.ece

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.


http://www.thenews.com.pk/Todays-News-3-187125-Oil-production-at-22-year-high

Riaz Haq said...

US is where the shale gas extraction technology was developed. Almost all of the world's shale gas today is being produced in the US.

However, other companies elsewhere, particular Polish companies, are very active in starting to do shale and tight gas exploration. Here's one example in Pakistan:

KARACHI - Pakistan is expected to start producing 30 Million Cubic Feet per day (MMCFD) of tight gas in July-August this year from Sajawal gas field located in the district of Dadu. According to media reports quoting government officials this would be first time the country would be producing tight gas. Pakistan has estimate tight gas reserves of about 40 Trillion Cubic Feet (TCF). The first tight gas sales and purchase agreement was signed on November 13, 2012 in Islamabad for production from a tight gas reservoir in Pakistan from Kirthar Block in Dadu, Sindh. The Kirthar Block is jointly owned by Polish Oil and Gas Company (PGNiG), which has 70 percent stake and Pakistan Petroleum Limited owns 30 percent. For the implementation of this project, SSGC has been awarded a contract for the construction of 52-km pipeline from Kirthar Block’s Rehman Gas Field which will be integrated into SSGC’s system at Naing Valve Assembly through the Bhit gas pipeline.

http://www.pakistantoday.com.pk/2013/05/14/news/profit/pakistans-first-tight-gas-expected-in-july-august/

Here's an excerpt of a paper describing the difference between shale gas and tight gas:

All Shale Gas reservoirs are not the same. There are no typical Tight Gas reservoirs. These two statements can be found numerous times in the literature on shale gas and tight gas reservoirs. The one common aspect of developing these unconventional resources is that wells in both must be ‘hydraulically fractured’ in order to produce commercial amounts of gas. Operator challenges and objectives to be accomplished during each phase of the Asset Life Cycle (Exploration, Appraisal, Development, Production, and Rejuvenation) of both shale gas and tight gas are similar. Drilling, well design, completion methods and hydraulic fracturing are somewhat similar; but formation evaluation, reservoir analysis, and some of the production techniques are quite different.

Much of the experience in shale and tight gas has been developed in the US and in Canada, to a lesser extent; and most of the technologies that have been developed by operators and service companies are transferable to other parts of the world....


http://www.onepetro.org/mslib/app/Preview.do?paperNumber=SPE-160855-MS

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.

http://www.ssgc.com.pk/ssgc/media_center/pdf/2012_12_december.pdf



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.

http://www.sfgate.com/bayarea/article/THE-DEADLY-TOLL-OF-WIND-POWER-3299197.php

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.

http://www.riazhaq.com/2011/05/pakistans-vast-shale-gas-deposits.html

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

http://www.greeningofoil.com/post/Deep-shale-gas-drilling-uses-least-amount-of-water.aspx

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.


http://www.upstreamonline.com/live/article1330879.ece

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.


http://www.polstock.pl/wse_market_news/pgnig_eyes_over_20_bcm_in_pakistani_gas_reserves/en/1138

Riaz Haq said...

Here's a Daily Times report on 33 TCF of tight gas in Pakistan:

KARACHI: Pakistan has an estimated tight gas reserves of 33 trillion cubic feet (tcf) which are more than the existing estimated natural gas reserves of 27 tcf in the country, said the Deputy Managing Director (operations) of Sui Southern Gas Company (SSGC) Syed Hassan Nawab.

Hassan Nawab was delivering a presentation on “Natural Gas Industry in Pakistan: Progress and Prospects” at 7th International POGEE Conference 2011 for Oil and Gas and Energy Industry at Karachi Expo Centre on Wednesday. Joint Secretary Ministry of Petroleum and Natural Resources Raashid Bashir Maser was the chairman of the session. Referring to a report of Pakistan Petroleum Exploration and Production Companies Association (PPEPCA), Hassan Nawab said the country will have sufficient natural gas if tight gas is explored with the help of advanced technology. He pointed out that the government has prepared the draft policy for tight gas and it is currently with the Council of Common Interest (CCI) and this will be approved soon.

Quoting some of the incentives in the draft tight gas policy, he said that investors will be offered 40 percent premium on the current gas price for exploring tight gas. Similarly, 50 percent premium will be offered on current gas price to investors if they commission their project by December 2011.

Hassan Nawab said that Pakistan can also produce gas from Thar coal with the help of underground coal gasification (UCG) technology. There is a potential to produce 35 tcf of coalbed methane from Thar coal, he noted.

He said that the availability of natural gas can be enhanced through import of liquefied natural gas (LNG) from neighbouring countries like Qatar and Iran—through 3rd party arrangments. He said the country has a very large network of pipelines and the importer of LNG can pump this gas to their buyers in upcountry destinations.


http://www.dailytimes.com.pk/default.asp?page=2011%5C05%5C19%5Cstory_19-5-2011_pg5_2

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.....


http://www.business-standard.com/article/reuters/tight-gas-china-s-unsung-unconventional-energy-revolution-113070900065_1.html

Riaz Haq said...

Here's Alexander's Gas and Oil Connections on tight gas reserves (TGR) in Pakistan:

Misuse of policy has to be avoided for early development of over 33 tcf of Tight Gas Reserves (TGR) estimated at upper and middle Indus, Kirthar areas. The tight gas reserves are 120 % of Pakistan's existing reserves where development process has to be accelerated in the face of persisting energy crisis.
Energy experts however feel that besides government's seriousness in developing untapped resources, the situation calls for the institutional capacity of the regulator body to ensure fast decision making on TGR and avoid misuse of the policy. However in order to minimize the chances of policy misuse, the government has introduced third-party auditing, sources said.

The US pressure against Iran gas pipeline is likely to accelerate the pace of development of domestic gas resources to meet the growing demand for energy in the country, sources said.
It will be interesting to note that besides the measured gas resources, the TGR potential of lower Indus, Potwar, Kohat and offshore areas is yet to be established. It is expected that the new policy on TGR which is in the pipeline will open a new vista of investment and reserve additions in unconventional but highly promising areas.

Active players in the exploration sector are of the view that the pricing and fiscal incentives are not exactly in line with industry demand, notwithstanding small requisite changes in policy are recommended as introduction of new technology/skills, which could prove challenging and may leave the field open for foreign E&P companies in the initial stages.
If current gas production is as a guide, companies with gas production concentrated in Sindh should benefit most. On this count, OGDC and PPL ideally placed. Miano and Sawan, two producing fields operated by OMV, reportedly carry cumulative 400 mm cfpd gas production potential.

It may be noted that the thrust of the policy seems to be on early production from known TGR fields. Companies too are likely to focus on existing fields for TGR potential in order tomeet the rising energy demand. As far as the incentive offered in the policy was concerned it provides a 40 % premium over 2009 policy prices, which translates into $ 3.4-6.2mm Btu, significantly below industry demand of 80 % of imported gas cost of $ 4.6-11.6/bbl.
The definition of TGR is generous relative to standards elsewhere and should encourage TGR development. Sources said that the areas in the policy need improvement are gas price incentives which are only available at the appraisal stage after audit by a third party, which minimizes incentives for active exploration for TGR.

While gas sales to a third party can only be made on prices at a maximum 50 % discount to the 2009 policy, which once again discourages exploration in areas where gas transmission network is unavailable. Under the proposed formula, the effective floor-ceiling on gas prices is at $ 3.4-6.2/mm Btu at $ 20-100/bbl oil prices.
The floor on gas prices based on a proposed formula of $ 3.4/mm Btu warrants attention given the high drilling and operating costs involved.

Another area that requires revision is early production incentives. Any companies that develop a TGR field within two years after approval will be subject to a further 10 % additional premium over 2009 policy prices (total 50 % premium).
Unlike other polices for conventional fields, the proposed TGR policy allows Exemption from windfall levies. Similarly, the delivery point for supply of gas is defined as the outer flung of the gas processing facility, which effectively transfers the burden of constructing pipeline to government-nominated parties.


http://www.gasandoil.com/news/2010/08/nts103476

http://www.ppepca.com/pdfs/presentations/Scope_of_Tight_Gas_Reservoir.pdf

Riaz Haq said...

Here's a Pakistan Times report on oil and gas drilling and production activities in Pakistan:

ISLAMABAD: The Ministry of Petroleum and Natural Resources has drilled 131 exploratory wells during the last five years to meet the growing needs of oil and gas in the country.

"It a fact that the production of oil and gas in the country is less than their demand. However, the government has taken numerous steps to enhance their production," official sources said on Saturday.

The sources said exploration licences for 30 blocks were granted during the year 2010. In the Petroleum Exploration and Production Policy - 2011, additional incentives have been offered to the investors for exploration of oil & gas in Pakistan, they added. The sources said the additional incentives would take care of extra risk taken by exploration and production companies for doing business under the prevailing security, law and order situation in the country.

They said presently 133 exploration licences had been granted for exploration of oil & gas in the country while 130 D&P leases were operative for the enhancement of production of oil and gas. Some 127 fields were producing 64,655 barrels of oil and 4215 Million Cubic Feet gas per day. They said efforts were also being made to put newly made discoveries on production during 2011-2013.

The sources said the completion of pending development projects would enhance daily oil and gas production, adding that enhanced exploration in all areas would add new oil and gas reserves by improving law & order and providing conducive environment to local and foreign companies.

A basin study has already been carried out to co-relate entire data of different basins which will help identify new play types while through state-of-the-art data repository centre, digitized data is also available to existing and new companies to participate in exploration which will help in expediting exploration of oil and gas.

The sources said concentrating on more exploration in deeper prospects and under-explored geological frontiers would add new reserves. A tight gas policy has been notified which will offer 40-50 per cent higher prices than petroleum policy- 2009 gas price to attract exploration companies to invest in tight gas fields, they added.

The sources said the country had estimated recoverable tight gas reserves of 24 TCF and initially 100-150 mmcfd would be added depending on its success rate. The Ministry of Petroleum and Natural Resources is also working on "Low Btu Gas Policy and Shale Gas Policy" to encourage the investors to exploit these reservoirs.


http://pakistantimes.net/pt/detail.php?newsId=26489

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....


http://tribune.com.pk/story/577736/too-hot-to-handle-govt-rejects-shale-gas-price-terming-it-too-much-to-absorb/

Riaz Haq said...

Here's a Polish report indicating the price of first tight gas produced in Pakistan is set $6 per mmBTU:

PGNiG and Sui Southern Gas Company Limited (SSGC) on Tuesday singed Gas Sales Purchase Agreement (GSPA), adding 30 Million Cubic Feet (MMCFD) of ''tight gas'' from Kirthar block in Sindh in SSGC''s system. After the signing ceremony, Dr Asim Hussain, the Prime Minister''s adviser on Petroleum and Natural Resources, told reporters that this is the first-ever ''tight gas'' GSPA in Pakistan.

The agreement was signed by Pakistan Petroleum Limited (PPL), Sui Southern Gas Company Limited (SSGCL) and Polskie Gornictwo Naftowe i Gazownictwo (PGNIG). The agreement signing ceremony was witnessed by Dr Asim Hussain, Dr Waqar Masood, the Secretary Ministry of Petroleum and Natural Resources and other officials. The Kirthar block is jointly owned by the Polish firm and Pakistan Petroleum Limited (PPL) and production from the field would start in May next year. Officials said that the price of ''tight gas'' would be $6 per mmbtu, which would be much higher than the current gas price. Hussain said that ''tight gas'' production would start in May 2013 and SSGC would lay a 52-kilometre-long pipeline at an estimated cost of Rs 325 million, carrying gas from the Suleman Range to the Nooriabad industrial estate.

He said that production from two wells that would produce 15 million cubic feet gas per day (mmcfd) each. He said that the Polish firm and PPL would further provide gas to the Sui Southern Gas Company limited and supply it to industries in the Nooriabad industrial estate in Sindh.

Hussain said that polish firm had invested $40 million to explore tight gas from Kirthar block in Dadu district while $20 million would be further invested. "The Polish firm has explored ''tight gas'' from two wells. It will also dig other wells to explore more gas," Hussain said

He rejected reports that Pakistan was facing any external pressure against the Iran-Pakistan gas project, adding that the nation would soon hear "good news" about this project. Hussain reiterated that the agreement was a significant step in the implementation of Pakistan''s Tight Gas Policy announced in 2011 for providing economically viable sources of energy. He stressed that the government had introduced incentives and investor-friendly policies for boosting investment in the Oil and Gas sector for substantially bridging the demand and supply gap of natural gas. Waldemar Woiciech Bak, Managing Director of PGNiG Pakistan thanked MD PPL for the support PPL has extended as a joint venture partner throughout this period to bring the project to its current status.

MD PPL Asim Murtaza Khan hoped that the timely completion of Rehman project will increase the gas supply significantly. He assured POL''s full support in this endeavour. MD SSGCL Zuhair Siddiqui appreciated JV partners for leading the industry in unconventional gas production and hoped that they will be bringing in more gas to the system in near future. An agreement between the Polish firm and SSGCL for laying the 52-kilometre-long pipeline from PGNIG''s Rehman Field to Naing Value Assembly of SSGCL in Dadu, was also signed on the occasion. SSGCL was awarded the contract for laying the pipeline. The project is likely to be completed by April next year.


http://islamabad.mfa.gov.pl/en/news/success_of_pgnig_

Riaz Haq said...

Here's a CNBC report on Prince Walid Bin Talal's concern about growing shale oil and gas hurting Saudi economy:

Saudi billionaire Prince Alwaleed bin Talal warned that the Gulf Arab kingdom needed to reduce its reliance on crude oil and diversify its revenues, as rising U.S. shale energy supplies cut global demand for its oil.

In an open letter to Oil Minister Ali al-Naimi and other ministers, published on Sunday via his Twitter account, Prince Alwaleed said demand for oil from OPEC member states was "in continuous decline".

He said Saudi Arabia's heavy dependence on oil was "a truth that has really become a source of worry for many", and that the world's biggest crude oil exporter should implement "swift measures" to diversify its economy.

(Read more: Oil prices jump as US crude takes bigger role on world oil stage)

Prince Alwaleed, owner of international investment firm Kingdom Holding, is unusually outspoken for a top Saudi businessman.

But his warning reflects growing concern in private among many Saudis about the long-term impact of shale technology, which is allowing the United States and Canada to tap unconventional oil deposits which they could not reach just a few years ago. Some analysts think this may push demand for Saudi oil, as well as global oil prices, down sharply over the next decade.

Over the past couple of years the Saudi government has taken some initial steps to develop the economy beyond oil - for example, liberalising the aviation sector and providing finance to small, entrepreneurial firms in the services and technology sectors.

Nowhere Is Immune from Unrest: Saudi Prince
Saudi Prince Alwaleed Bin Talal, talks to CNBC about turmoil in the Middle-East and the price of oil.
Naimi said publicly in Vienna in May that he was not concerned about rising U.S. shale oil supplies. Prince Alwaleed told Naimi in his open letter, which was dated May 13 this year, that he disagreed with him.
"Our country is facing a threat with the continuation of its near-complete reliance on oil, especially as 92 percent of the budget for this year depends on oil," Prince Alwaleed said.

(Read more: Don't mess with West Texas: US oil to keep outpacing Brent)

"It is necessary to diversify sources of revenue, establish a clear vision for that and start implementing it immediately," he said, adding that the country should move ahead with plans for nuclear and solar energy production to cut local consumption of oil.

The shale oil threat means Saudi Arabia will not be able to raise its production capacity to 15 million barrels of oil per day, Prince Alwaleed argued. Current capacity is about 12.5 million bpd; a few years ago the country planned to increase capacity to 15 million bpd, but then put the plan on hold after the global financial crisis.

While most Saudi officials have in public insisted they are not worried by the shale threat, the Organization of the Petroleum Exporting Countries (OPEC) has recognised that it needs to address the issue.

(Read more: OPEC ministers: falling demand is our top concern)

In a report this month, OPEC forecast demand for its oil in 2014 would average 29.61 million bpd, down 250,000 bpd from 2013. It cited rising non-OPEC supply, especially from the United States.

At its last meeting in Vienna in May, OPEC oil ministers spent time discussing shale technology and set up a committee to study it.


http://www.cnbc.com/id/100920411

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."

http://www.nepra.org.pk/Publications/State%20of%20Industry%20Reports/State%20of%20Industry%20Report%202007.pdf

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.

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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.


http://blogs.wsj.com/indiarealtime/2013/06/11/why-india-cant-unlock-its-shale-gas/

Riaz Haq said...

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

http://dawn.com/news/1038762/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.

http://www.riazhaq.com/2013/06/us-eia-estimates-pak-shale-oil-reserves.html

Riaz Haq said...

A news story in Pakistan's Express Tribune claims that US EIA estimates of Pakistan shale oil and gas reserves are "exaggerated".

http://tribune.com.pk/story/597544/hold-your-barrels-eia-report-exaggerates-pakistans-shale-potential/


I find such claims by journalists and the people they quote totally ridiculous.

Their opinion is not based on any knowledge about shale geology and methods of assessment of oil and gas reserves.

Americans know more about shale oil and gas based on actual experience of the ongoing shale revolution in America.

Opinions of US EIA experts are much more reliable in this regard.

Riaz Haq said...

Here's a Guardian story on possible end of CNG as fuel for cars:

When Pakistan first started promoting compressed natural gas to the nation's motorists in the 1990s, the alternative to petrol seemed like a wonder fuel.
Getting motorists to convert their cars to run on cleaner, cheaper gas would cure urban pollution and lower demand for the imported oil that was gobbling the country's foreign currency reserves.
Car owners loved it and today 80% of all cars in Pakistan run off compressed natural gas (CNG), according to the Natural and Bio Gas Vehicle Association (NGVA), a European lobby group. Only Iran has more gas cars running on the road.
But as the country struggles with a chronic gas shortage, Pakistan's 20-year CNG experiment seems to have been thrown into reverse gear.
The government has introduced strict rationing. And there have even been discussions about shutting down thousands of gas stations for the whole of thewinter. "CNG is finished in Pakistan," said Owais Qureshi, the owner of a handful of once lucrative gas stations in Rawalpindi. "I'm not going to invest any more money in it."
It has been years since he has been legally allowed to sell and install CNG conversion "kits": essentially large gas cylinders that are placed in the boot of a car to feed the engine. The system allows for cars to still be able to use petrol instead, if required.
Although CNG is popular with an estimated 2.8m motorists in Pakistan, according to the NGVA, the increasingly scarce resource is also in demand from other sectors – including the country's factories and for domestic use.
"The government has been left with little choice but to put a lid on it because there simply isn't much gas left," said Farrukh Saleem, an economist. "It has been a massive policy failure because the government actively promoted CNG knowing full well that natural gas reserves would not last beyond 25 years."
Successive governments heavily subsided CNG, ran schemes to encourage car conversions and dished out licences to political allies to build gas stations.
But abandoned stations are now a common sight around the country. So too are queues of hundreds of motorists waiting to fill their cars on Wednesdays – the last remaining day of the week in many places on which CNG is legally allowed to be sold.
This weekly ordeal for CNG users is compounded by a chronic lack of electricity, the other aspect of Pakistan's energy crisis. And because electricity is needed to run the gas compressors used by CNG stations car re-filling grinds to a halt during the many power cuts.
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"All over the world countries are promoting CNG but in Pakistan they are killing it off," said Ghiyas Abdullah Paracha, chairman of All Pakistan CNG Association.
"If we don't have enough gas we should import LNG [liquid natural gas]."
Pakistan, however, has failed to build the infrastructure needed to import large amounts of gas from overseas. A legal challenge by Pakistan's activist supreme court killed off one scheme to build a massive LNG terminal in Karachi.
The other lifeline for Pakistan's CNG supply is a controversial, multi-billion dollar pipeline to import natural gas from Iran. But Pakistan lacks the cash to build its half of the pipeline and the US has warned that completing the project would be in breach of US economic sanctions imposed on Iran.
Even as natural gas is being touted elsewhere in the world as a great alternative to petrol, soon it may be a mere memory in Pakistan.
Paracha fondly recalls the grand opening of the first CNG station in Karachi, which was built with foreign aid money. "It was the start of a revolution," he said. "Before CNG came you could not see the sky in the cities because the air was so polluted."


http://www.theguardian.com/world/2013/dec/25/cars-pakistan-compressed-natural-gas-rationing

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.


http://www.marketwatch.com/story/jura-announces-gas-and-condensate-discovery-in-badin-iv-south-2014-02-18-81732628?reflink=MW_news_stmp

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.
http://news.outlookindia.com/items.aspx?artid=836884

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.

http://tribune.com.pk/story/751990/samples-sent-us-to-assess-potential-of-pakistans-shale-gas-reserves/

Riaz Haq said...

Pakistan’s first LNG terminal is finally on track to come onstream by early 2015, but whether the country can afford LNG imports is still in doubt, according to analysts.
Houston-based Excelerate Energy has agreed to install an FSRU off the coast near Port Qasim by the end of Q1 next year, which it will lease to Pakistan for 15 years, Daniel Bustos, Excelerate’s chief development officer, told Interfax.
Meanwhile, Pakistani conglomerate Engro Corp. is laying the pipelines and other infrastructure needed to deliver the LNG into the market, under an LNG service deal it reached with state distributor Sui Southern Gas Co. earlier this year.
In addition, consultancy FGE was appointed in September to advise the government in negotiations for “viable and competitive” LNG supplies.
These agreements have given the project considerable momentum following years of corruption scandals and other setbacks.
“Previously, the government always tried to get the supply before putting the terminal in place, and that brought delays over and over again,” said Bustos.
“What they’re doing now is running the process in parallel, but they started with the terminal. The big advantage of that is that when the suppliers see the terminal is a reality, they get more aggressive in dealing with the customers and are more willing to close a deal,” he added.
The FSRU will have the capacity to store 151,000 cubic metres and import 3.5 mtpa, or 11.3 million cubic metres per day (MMcm/d). According to Engro, the volume would reduce Pakistan’s gas shortfall of 45.3 MMcm/d by 25%.
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Domestic output – the country’s only source of gas at present – declined from a 10-year peak of 41.2 billion cubic metres in 2012 to 38.6 bcm in 2013, according to statistics from BP.
The need for more gas could underpin the development of a second terminal close behind the Excelerate FSRU, Bustos said. Local news reports in September said Sui Southern Gas planned to issue a tender within weeks for a 5.7 MMcm/d regasification facility.
“It’s a market that has tremendous possibilities to grow,” said Bustos. “Pakistan is following in the path of Argentina and Brazil in terms of continuing to add units – once they start seeing the benefits of FSRUs, they keep going back to the same concept.”
Credit problems
While the terminal’s development appears to be moving ahead, it is harder to discern any progress in the government’s LNG supply negotiations – although the finance minister said it is looking to secure the full 3.5 mtpa.
Islamabad has been in discussions with Qatar over the past few years, but the seller’s demand for a high oil-linked price was reportedly an issue when the two sides met in July.
There have also been suggestions Pakistan is beginning talks with Malaysia’s Petronas, which is expanding its large Bintulu LNG complex.
However, Pakistan’s ability to sign deals for long- or short-term LNG is questionable, particularly because the country’s credit risk would require it to pay more than already high Asian LNG prices.
“As a marketer of spot LNG, your main concern is your buyer’s creditworthiness, and we’ve seen other credit-insecure LNG buyers such as Argentina having to pay for cargoes with cash in advance – that precedent is already set,” said Benjamin Gage, an associate director of global LNG at IHS.
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“The project will be subject to scrutiny and it will be closely watched, particularly in the context of intensified pressure on the government over its record of attracting investment and bolstering energy security, and as opposition parties seek to seize on opportunities to weaken government credibility,” said Fry.

http://interfaxenergy.com/gasdaily/article/13770/momentum-builds-behind-troubled-pakistan-lng

Riaz Haq said...

NY Times on why oil prices are falling:

When Morse and Jaffe wrote their article last year, the price of oil was more than $100 a barrel. Today, the per-barrel price is in the low- to mid-$80s. It has dropped more than 25 percent since June. There was a time when $80 a barrel would have been more than satisfactory for OPEC members, but those days are long gone. Venezuela’s budgetary needs requires that it sell its oil at well above $100 a barrel. The Arab Spring prompted a number of important OPEC members — including Saudi Arabia and the United Arab Emirates — to increase budgetary spending to keep their own populations quiescent. According to the International Monetary Fund, the United Arab Emirates needs a price of more than $80 to meet its budgetary obligations. That’s up from less than $25 a barrel in 2008.

Not long ago, Venezuela asked for an emergency OPEC meeting to discuss decreasing production. Iran has said that such a meeting is unnecessary. Meanwhile, Saudi Arabia has made it clear that it is primarily concerned with not losing market share, so it will continue to pump out oil regardless of the needs of other OPEC members. This is not exactly cartel-like behavior. The next OPEC meeting is scheduled for late November, but there is little likelihood of an agreement.

Continue reading the main storyContinue reading the main storyContinue reading the main story
And why does OPEC suddenly find itself in such disarray? Simply put, the supply of oil is greater than the demand, and OPEC has lost its ability to control the supply. Part of the reason is a slowdown in global demand. China’s economy has slowed, and so has its voracious appetite for oil. Japan, meanwhile, is increasingly turning to natural gas and nuclear power.


But an even bigger part of the reason is that the shale revolution in North America is utterly changing the supply-demand dynamic. Since 2008, says Bernard Weinstein, an energy expert at Southern Methodist University, oil production in the United States is up 60 percent. That’s an additional three million barrels a day. Within a few years, predicts Morse, America will overtake Russia and Saudi Arabia and become the world’s largest oil producer.

What’s more, according to another article Morse wrote, this one for Foreign Affairs magazine, “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.” In other words, the American energy industry might well be able to withstand further price drops easier than OPEC members.

When I got Jaffe on the phone, I asked her if she thought OPEC was a spent force. “You can never say never,” she replied, and then laid out a few dire scenarios — mostly revolving around oil fields being bombed or attacked — that might make supply scarce again. But barring that, this is a moment we’ve long been waiting for. Thanks to the shale revolution, OPEC has become a paper tiger.

http://www.nytimes.com/2014/10/21/opinion/joe-nocera-a-world-without-opec.html?_r=0

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.

WHY THE PAST IS PROLOGUE

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.

http://www.foreignaffairs.com/articles/141202/edward-l-morse/welcome-to-the-revolution

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.


http://www.ft.com/intl/cms/s/0/0a25ecf4-5937-11e4-9546-00144feab7de.html

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?
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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.

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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.


http://www.thenational.ae/business/economy/pakistans-500bn-gold-mine-kept-under-wraps#full

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.

http://www.nytimes.com/2015/01/31/business/international/chevron-to-abandon-shale-venture-in-poland-a-setback-to-fracking-europe.html

Riaz Haq said...

Pakistan discovers 'huge' reserves of iron ore

Pakistan on Wednesday said it has discovered major reserves of iron ore as well as copper, silver and gold in its central province of Punjab.

The reserves were found in Chiniot, around 160 kilometres northwest of Lahore, by Chinese group the Metallurgical Cooperation of China.

A senior provincial administrative official told AFP that initial estimates indicated 500 million tonnes of iron ore, a primary ingredient in steelmaking, had been discovered.

He said the Chinese company has expressed interest in setting up a steel mill on the site, adding that the extracted iron had been tested in Swiss and Canadian laboratories, which found 60-65 per cent of it to be high grade.

The official added that silver, copper and gold samples would also be sent for testing soon.

Speaking at the site on Wednesday, Prime Minister Nawaz Sharif said the discovery could help Pakistan's stuttering economy turn a corner and end its “begging bowl” culture.

“It is Allah's blessing that under the lush green fields rich deposits of copper, iron and gold have been found, which will help the country get rid of the 'begging bowl' for good,” Nawaz said.

Conflict, instability, corruption and a chronic energy shortage have hampered Pakistan's economy for years. The IMF granted a $6.6-billion loan to Pakistan in September 2013 on the condition that it carry out extensive economic reforms, particularly in the energy and taxation sectors.

http://www.dawn.com/news/1162943

Riaz Haq said...

#Pakistan confirms it has 105 trillion cubic ft #shale gas, 58 billion barrels of shale oil reserves #energy http://www.dawn.com/news/1220955

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 http://tribune.com.pk/story/994883/hydrocarbon-presence-pakistan-has-10159-tcf-of-shale-gas-deposits-usaid/ …

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 http://www.brecorder.com/fuel-a-energy/193:pakistan/1248354:drilling-of-first-shale-oil-gas-well-starts-in-sindh-abbasi/ …

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.

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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...

#Hungary's MOL makes it an even dozen #oil & #gas discoveries in #Pakistan http://upi.com/6332948t via @crudeoilprices

Hungarian energy company MOL said Friday it made a new discovery of oil and gas in Pakistan, bringing the total there so far to an even dozen.

Operating through a national subsidiary in Pakistan, the company said its discovery in the so-called TAL block in Pakistan is No. 8 so far in that basin and No. 12 in its history in the country. MOL has worked in Pakistan for the last 17 years.

"We are very proud of our 8th discovery in the MOL-operated TAL block," Berislav Gaso, MOL's chief officer for exploration and production, said in a statement. "This new discovery will help to improve the energy security of the country."

Pakistan consumes most of the natural gas it produces and the country has faced power issues because of aging infrastructure. According to the Asian Development Bank, addressing chronic energy issues is one of the ways in which Pakistan can ensure its economic growth remains on course.

Pakistan's economy is expected to expand from a 4.2 percent growth rate in 2015 to 4.8 percent by next year. A net importer of energy resources, the ADB said lower oil prices and soft inflationary pressures were pushing Pakistan's economy forward.

MOL said it was producing around 80,000 barrels of oil equivalent per day from the TAL block so far. Reserves flowed from the latest confirmed discovery at a test rate of around 2,000 barrels of oil per day and 900 barrels of oil equivalent in natural gas per day.

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.

http://tribune.com.pk/story/1132448/pakistans-oil-gas-discoveries-touch-record/

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.

Gas utilities: World Bank recommends single transmission firm

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.

Sui lease extension: PPL to pay 10% bonus to Balochistan

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.