Pakistan seeks foreign allies to tap into its shale potential

Source: DollarPhotoClub

Pakistan is stepping up its efforts to tap into its tight and shale gas resources. Speaking at an industry conference in Pakistan – jointly organized by NED University of Engineering and Technology (Pakistan) and Norwegian University of Science and Technology (NTNU) – Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi said that Pakistan is facing a huge gap between demand and supply of energy.

The ministers said that Pakistan’s current total gas production is 4 billion cubic feet per day (Bcf/d) against the demand of 8 (Bcf/d) of gas, and that the oil requirement is seven to eight times higher than the local production. To improve this situation Mr Abbasi said that Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL) have been assigned the task of launching a pilot project to drill Shale gas and oil wells.

But help is also available from abroad. Recent days brought the news that the U.S. will conduct a second assessment of Pakistan’s shale oil and gas reserves. U.S. Agency for International Development (USAID) previously undertook such a study but did not cover some areas of Balochistan, Sindh and Khyber-Pakhtunkhwa.

In the first assessment, USAID estimates showed that Pakistan had massive deposits of 10,159 trillion cubic feet of shale gas and 2.3 trillion barrels of shale oil – figures that were several times higher than those released by the US Energy Information Administration (EIA).

The USAID further revealed that risked technically recoverable resources were 95 trillion cubic feet of shale gas and 14 billion barrels of shale oil.

According to EIA assessment in April 2011, Pakistan had 206 trillion cubic feet of shale gas in the lower Indus Basin, of which 51 trillion cubic feet were recoverable. However, in June 2013, it revised the estimate upwards to 586 trillion cubic feet, of which 105 trillion cubic feet were technically recoverable.

Pakistan has now accepted the offer of the second study for which the U.S. will bear the entire cost.

Meanwhile, new collaboration is being formed between the country’s state owned companies, OGDCL and PPL and the Norwegian State Oil Company, Statoil, with Norwegian ambassador Tore Nedrebo also in attendance at the conference.

Pakistan has already made some efforts at exploring its shale resources. Pakistan’s Daily Times reported that according to the official sources in the Ministry of Petroleum and Natural Resources, exploration companies have spudded 271 wells and made 73 oil and gas discoveries since June 5, 2013.

Within the last three years, it’s been reported that 46 new exploration licences, covering an area of 94,608.85 sq. km had been awarded to accelerate the exploration activities in the country, while at the same time the government is taking steps to revoke licences that are inactive. It’s been reported that recently notices were issued to 12 inactive licence holders because of their failure to start exploration work in accordance with the agreement.

“More inactive licences will be revoked shortly after completing all formalities,” the source quoted by the Daily Times said, adding that the government is making all-out efforts to pave the way for the exploration of Pakistan’s unconventional resources.

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