The government is expecting to complete a study on fixing the exact estimates of shale gas/oil reserves by the end of November 2014, which according to revised estimates of the US Energy Information Administration (EIA), stand at 586 Trillion Cubic Feet (TCF) and over 9 billion barrels of shale oil.
"After getting reliable estimates we will formulate a shale oil/gas policy and Exploration and Production (E&P) companies will be offered a price for extracting shale oil/gas, which is 100 percent higher than the $6/mmbtu price announced in Exploration and Production Policy 2012," an official associated with the developments said.
Shale gas has been commercially extracted in many parts of the world particularly in the US, where gas prices witnessed a sharp decline since shale gas was marketed in 2005, he maintained. "One reason why the US produces shale gas in abundance is because of the economies of scale. We would have to follow the same trend and this can not happen overnight. Pakistan hasn't been able to attract many oil industry service providers, which own production equipment like rigs. "There are around five such companies here whereas in a country like ours there ought to be at least 30. With a rise in their number, competition ensues and cost comes down," he added.
"We are working on the shale, tight and low BTU gas reserves in collaboration with USAID and hopefully will complete this survey by the end of November 2014," the official added. The first-ever tight gas Sales and Purchase Agreement was signed on November 13, 2012 in Islamabad for first production from a tight gas reservoir in Pakistan from Kirthar Block in Dadu, Sindh, jointly owned by Polish Oil and Gas Company (PGNiG) and Pakistan Petroleum Limited (70 percent) and PPL (30 percent).
Apart from this, PPL in collaboration with ENI is set to start drilling exploratory wells in Sindh's deep sea in 2014. In this regard, around seven exploratory wells, eight appraisal wells and 19 development wells have been planned to discover shale and tight gas in Sindh in five years. On the directives of Shahid Khaqan Abbasi, Federal Minister for Petroleum and Natural Resources, the Director General Petroleum Concession (DGPC) is already working on a plan to explore shale gas/oil in the country.
The official said, "as far as Pakistan's recoverable oil/gas reservoirs are concerned, almost 90 percent of the country's total area is still barren. We have not worked on exploring offshore oil and gas resources, while India is producing some 0.7 million barrels of crude oil from Bombay High Region." Pakistan's low BTU gas reserves are estimated at 2 TCF and that of tight gas around 40 TCF, which makes them larger than the existing natural gas reserves of over 24 TCF.
These estimates of recoverable hydrocarbon reserves are many a time higher than so far proven reserves of 24 TCF for gas and about 300 million barrels for oil. Pakistan currently produces about 4.25 Billion Cubic Feet per Day (BCFD) of gas and about 84,000 barrels of crude oil per day. EIA puts Pakistan among the top 10 countries by recoverable shale oil reserves with 9.1 billion barrels of oil technically recoverable. The countries 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).