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Pakistan’s shale reserves-work and investment way forward

Shale gas is becoming increasingly important source of natural gas across the world with estimates of more than 15000 trillion cubic feet (TCF). USA and Canada, being self-sufficient leading the market with significant amount of shale gas production. Areas around the world have identified technically recoverable shale gas and more is being explored each day.

In a report by US Energy Information Administration (EIA), Pakistan is listed among the top 10 countries of the world with the largest shale oil reserves. LMKR Resources has been actively involved in conducting research studies on the potential of shale gas in Pakistan. Shale resource has occurred in other countries. Its gas exploration and development is costly. Pakistan exploration history shows it has discovered more gas than oil and hence it was used to meet its energy need that consequently widened the supply-demand gap.

A consortium of state-owned companies, Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL), is being formed to undertake pilot projects to assess the cost of extracting shale gas and oil after identification of their massive reserves in potential areas. These pilot projects are likely to be executed in selected areas of Balochistan, Sindh and Khyber Pakhtunkhwa.

In 2015, a study completed in cooperation with the USAID had confirmed presence of 10,159 trillion cubic feet (TCF) shale gas and 2,323 billion of stock tank barrels (BSTB) shale oil in place resources.

According to the study, there are 188 TCF gas and 58 BSTB oil technically recoverable resources, while the risked technically recoverable resources stand at 95 TCF gas and 14 BSTB oil. The study covered lower and middle Indus Basin, which geographically spread over Sindh, southern parts of Punjab and eastern parts of Balochistan. Total area under the study was 271,700km, which is 33 percent of the total sedimentary area of the country.

During the study, a detailed analysis of 124 wells was carried out, including laboratory analysis on shale cores and cuttings in the United States. Objectives of the study were to validate shale gas resource estimate, initial findings, assess availability of required technology and infrastructure for shale gas operations and formulate guidelines for the shale gas policy.

The study further confirmed that the basic technology required for shale gas exploration like horizontal drilling and hydraulic fracturing was available in the country and being used for conventional and tight gas reservoirs.

The sources said the Petroleum and Natural Resources Division had invited local and international Exploration and Production (E&P) companies to tap the massive shale gas and oil reserves. A committed shale gas and oil centre has been established at the Petroleum House, which is now open for all interested E&P companies. The sources termed the deposits a future source for abundant petroleum products in the country.

Shale gas and oil centre has been established to facilitate interested Exploration and Production (E&P) companies in tapping the recently identified 188 TCF gas and 58 BSTB oil technically recoverable resources in lower and middle Indus Basin. The study covered lower and middle Indus Basin which geographically

Spread over Sindh, southern parts of Punjab and eastern parts of Balochistan. Total area under the study was 271,700 kilometers, which is 33 percent of total sedimentary area of the country. During the study, detailed analyses of 124 wells were carried out including laboratory analysis on Shale Cores and Cuttings in the United States. Objectives of the study were to validate shale gas resource, estimate initial findings, assess availability of required technology and infrastructure for shale gas operations and formulate guidelines for the Shale gas policy.

 

The study had further confirmed that basic technology required for shale gas exploration i.e. horizontal drilling and hydraulic fracturing, was available in the country and being used for conventional and tight gas reservoirs. Areas around the world have identified technically recoverable shale gas and more is being explored each day.

In a report by US Energy Information Administration (EIA), Pakistan is listed among the top 10 countries of the world with the largest shale oil reserves. Countries across the world are exploring their shale gas potential and some are already producing shale gas in commercial quantities. Since the required technology is not available everywhere and there are forever rising concerns of production waste, surface impact, and other environmental issues, even the areas with high reserves of shale are unable to perform extraction.

In essence, the worldwide implementation of shale gas production technologies is still pending. Pakistan also has a good potential of shale gas/oil production in the future. Studies depicts many areas in Pakistan which are suitable for unconventional extraction of hydrocarbons, owing to the fact that the risks involved with extraction are relatively low in these areas.

The research also indicated the presence of tight sands having trillions of cubic feet of recoverable reserves. Key shale formations of upper Indus basin lie in oil window with recoverable reserves of multibillion barrels of oil. It’s only a matter of time and resources when Pakistan would also be one of the contributors to the worldwide oil/gas market. The successful exploration and production of shale-gas resources in the United States and Canada sets a new possible solution towards the energy crisis presently affecting most countries of Asia.

Energy professionals have recommended the government to include such terms and conditions in the shale policy framework that address the environmental aspects, provide improved fiscal incentives and promote investment in the unconventional energy sector. At the concluding ceremony of the first-ever “International Conference on Unconventional Resources” it was strongly recommended the exploitation of shale and tight oil and gas resources in Pakistan.

Present pilot projects

The energy also called for undertaking pilot projects by state-owned companies, including Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL), in collaboration with the Norwegian state oil company, Statoil, to evaluate the underground deposits and frame development strategies. OGDC and PPL had been tasked with launching a pilot project to drill shale oil and gas wells.

Pakistan has great energy resources and consistent efforts are needed to exploit them. There is the need for stepping up efforts to explore the conventional and unconventional resources to meet energy needs of the country. Pakistan is facing a huge gap between demand and supply of energy as gas production stood at 4 billion cubic feet per day (bcfd) compared to demand for 8 BCFD. In the case of oil, the demand was seven to eight times higher than domestic production.

A recent study had identified the presence of massive shale oil and gas resources in the country. According to the study, Pakistan has reserves of 188 trillion cubic feet (TCF) of gas and 58 billion barrels of oil whereas the risked technically recoverable resources were 95 TCF of gas and 14 billion barrels of oil.

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