State owned Oil and Gas Company Limited (OGDCL) has started exploration of shale oil/gas reservoirs in the country, senior officials said. The OGDCL board of directors recently approved $8 million for exploring shale oil/gas reservoirs, which according to US Energy Information Administration (EIA), stands at 586 Trillion Cubic Feet (TCF) of gas and over 9 billion barrels of shale oil in Pakistan.
The American federal authority on energy statistics and analysis has estimated fresh recoverable shale gas reserves of 105 TCF and over 9 billion barrels of oil in Pakistan. Federal Minister for Petroleum, Shahid Khaqan Abbasi has directed the OGDCL chairman board of directors Zahid Muzaffar and Managing Director (MD) OGDCL, Mohammad Rafi to expedite their efforts in exploring shale oil/gas reservoirs to deal energy crisis.
The OGDCL is the leading oil/gas producer with over 1.25 Billion Cubic Feet per Day (BCFD) of gas and nearly 45,000 barrels of crude oil. The Ministry of Petroleum and Natural Resources has formulated first-ever Shale Gas Policy and has to get formal approval from the Economic Co-Ordination Committee (ECC) of the cabinet.
A senior Petroleum Ministry official told Business Recorder here on Friday that according to shale gas policy the Exploration and Production (E&P) companies will get around $12 per MMBtu as wellhead gas price, which is almost double the price of E&P companies getting for conventional gas production.
Pakistan's conventional gas reserves are estimated to be 58 TCF. The exploration of shale gas is capital intensive and hundreds of wells are explored with the depth of 2,000 to 4,000 meters and explored the shale gas by fracturing the stones with shale gas in rocks. Shale gas is extracted directly from a sedimentary source rock and since it has low permeability as compared to conventional reservoirs, it did not come out easily and, hence, specific investments and pricing is required for its exploitation.
The official said the new estimates appeared to be very encouraging for Pakistan but extraction of shale gas/oil is four times costlier and technology extensive as compared to conventional natural resources. He said the shale gas had seen tremendous development in the US and a couple of other countries were trying to use the latest technology. Pakistan, he said, was also encouraging exploration and production companies to venture shale gas.
Pakistan is particularly heavily dependent on natural gas for its energy needs. At present actual demand for gas is around 8 BCFD, while managed demand is hovering around 6 BCFD against total supply of 4.3 BCF. Shale gas/oil reservoirs estimates of Pakistan are backed by proven studies and verified technical data. "The risked, technically recoverable shale gas resource is estimated at 201 TCF, with 96 TCF in India and 105 TCF in Pakistan," the EIA said. At present, no shale gas is being produced in Pakistan and significant work is required to kick start this high potential energy source, the officials said.
US consultant Advanced Engineering Associates International, Inc (AEAI) that embarked on the strategic study to assess the actual reserves of shale gas in Pakistan and then with the help of the US experts four methods would be formulated to exploit the shale gas reserves. The official said that the US has developed skill to explore shale gas 40 years ago and the shale gas in the US is found on the surface, whereas in Pakistan it is lying in depth 2,000 to 4,000 meters in the land.
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