Pakistan's vast Shale Oil & Gas Reserves | Updates & Discussions

[Kompromat]

Pakistan shale gas, oil reserves estimated at 105 TCF, 9.1bn barrel, Senate told

 

[KingMamba]

Pakistan shale gas, oil reserves estimated at 105 TCF, 9.1bn barrel, Senate told

How much would that be based on global estimates?

 

[Kompromat]

How much would that be based on global estimates?

You mean exports?

 

[KingMamba]

You mean exports?

Nah I mean ranking in terms of who has the most reserves, least etc.

 

[Kompromat]

Nah I mean ranking in terms of who has the most reserves, least etc.

Pakistan's oil reserves are the 8th largest.

 

[Menace2Society]

Shale oil gives us roughly 60 years of operating at full capacity and low cost. I wish I could be alive to see a Pakistan 40 years into having this much cheap oil and gas. Shame I had to join the terrorism era.

 

[VCheng]

Pakistan's oil reserves are the 8th largest.

These are only "technically recoverable" estimates:

QUOTE: "The term “technically recoverable” is much more expansive. According to the U.S. Geological Survey, “Technically recoverable resources” are “resources in accumulations producible using current recovery technology but without reference to economic profitability.” This differs from “proved reserves” in many ways. It is less restrictive than the 90 percent probability point, often including a range of estimates with a corresponding range of probabilities; it includes estimates of yet-to-be-discovered oil and gas; and includes oil and gas that may not be producible with current prices and other economic conditions. Thus, it can be a much larger figure than “proved reserves.”" /QUOTE

 

[RiazHaq]

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.

Samples sent: US to assess potential of Pakistan’s shale gas reserves – The Express Tribune

 

[farhan_9909]

Nah I mean ranking in terms of who has the most reserves, least etc.

Shale Gas: 12th Ranking

Shale oil: 8th/9th ranking

NOTE:The risked reserve's as per the most recent report of EIA are in excess of 500TCF though recoverable figure stand at 105TCF.

 

[narcon]

http://www.eia.gov/analysis/studies/worldshalegas/pdf/chaptersxx_xxvi.pdf

 

[niaz]

Before we start jumping with joy at the thought of supposedly vast shale gas /oil reserves. There are three important points to consider.

Cost.

Per 2013 data, average cost of drilling a shale gas well in the USA was $8-million. Average cost of a standard onshore gas/oil well in the US is about $600- per foot of depth; since most common fracking depth is about 8,000 ft.; a fracking well cost about 60% more.

Outside US such as in Poland average cost of shale gas well averaged $14 to $16 million. This is because drilling company needed to import fracking equipment and crews. In Pakistan it would cost at least $16-miilion may be even $20-million per well.

Only data available with me about fracking is from the US. In 2013, in the fracking operation of the Marcellus Shale field; 728 wells were producing 2.2-billion cft per day. Let us assume that same will apply to Pakistan. Since gas shortfall is likely to reach 8-billion cft per day by 2025. One would need to sink about 2,500 fracking well during next 10 years; that means is an investment of $50-billion or $5-billion per year.

Water:

On average one fracking well consumes 5-million gallons of water per year. 2,500 fracking wells will therefore consume 12.5-billion gallons of water per year. On the other hand very little water is needed in natural gas production (in fact lot water is produced this is normally pumped back). Pakistan is short of water as it is. Unless fracking is done somewhere near the sea such as Badin, fracking on a large scale could aggravatre Pakistan’ water shortage.

Pollution.

Between 20 to 40% of the water used in fracking returns to surface as toxic waste. Some of this waste water contains high levels of radioactive elements such as Radium. Unless treated this will contaminate already scarce water supply. Pakistan cannot even control waste from tanning industry, how will we cope with about 2.5-billion gallons of toxic waste from 2,500 fracking wells.

There are also many other environmental issue that need to be addressed.

Please understand I am not trying to be a spoil sport, but as someone who knows a little bit about oil industry, I consider it is my duty to inform members of this august forum about what is actually involved in fracking.

 

[surya kiran]

Before we start jumping with joy at the thought of supposedly vast shale gas /oil reserves. There are three important points to consider.

Cost.

Per 2013 data, average cost of drilling a shale gas well in the USA was $8-million. Average cost of a standard onshore gas/oil well in the US is about $600- per foot of depth; since most common fracking depth is about 8,000 ft.; a fracking well cost about 60% more.

Outside US such as in Poland average cost of shale gas well averaged $14 to $16 million. This is because drilling company needed to import fracking equipment and crews. In Pakistan it would cost at least $16-miilion may be even $20-million per well.

Only data available with me about fracking is from the US. In 2013, in the fracking operation of the Marcellus Shale field; 728 wells were producing 2.2-billion cft per day. Let us assume that same will apply to Pakistan. Since gas shortfall is likely to reach 8-billion cft per day by 2025. One would need to sink about 2,500 fracking well during next 10 years; that means is an investment of $50-billion or $5-billion per year.

Water:

On average one fracking well consumes 5-million gallons of water per year. 2,500 fracking wells will therefore consume 12.5-billion gallons of water per year. On the other hand very little water is needed in natural gas production (in fact lot water is produced this is normally pumped back). Pakistan is short of water as it is. Unless fracking is done somewhere near the sea such as Badin, fracking on a large scale could aggravatre Pakistan’ water shortage.

Pollution.

Between 20 to 40% of the water used in fracking returns to surface as toxic waste. Some of this waste water contains high levels of radioactive elements such as Radium. Unless treated this will contaminate already scarce water supply. Pakistan cannot even control waste from tanning industry, how will we cope with about 2.5-billion gallons of toxic waste from 2,500 fracking wells.

There are also many other environmental issue that need to be addressed.

Please understand I am not trying to be a spoil sport, but as someone who knows a little bit about oil industry, I consider it is my duty to inform members of this august forum about what is actually involved in fracking.

Very informative niaz. But, also given the situation where it may become a necessity to drill this, don't you think it may make sense to do the following:

1. Initiate partnership with SA or other middle eastern countries to invest in this with a partnership model via a JV?
2. If such a partner is involved, it will ensure safeguards can be put in place to ensure reduction in environmental damage.
3. Water management being a bigger issue, will try to isolate it for this. The water for this need not be drinking water. So can the water from any other source, for e.g sea water from the coast like you are talking or treated sewage from the populated areas be used? While, I understand, sewer treated water may not be enough, it could be a start?

 

[niaz]

Very informative niaz. But, also given the situation where it may become a necessity to drill this, don't you think it may make sense to do the following:

1. Initiate partnership with SA or other middle eastern countries to invest in this with a partnership model via a JV?
2. If such a partner is involved, it will ensure safeguards can be put in place to ensure reduction in environmental damage.
3. Water management being a bigger issue, will try to isolate it for this. The water for this need not be drinking water. So can the water from any other source, for e.g sea water from the coast like you are talking or treated sewage from the populated areas be used? While, I understand, sewer treated water may not be enough, it could be a start?

I have not even mentioned other side effects of fracking. There are about a million fracking wells in the US and some of the data is really frightening. For example according a report dated June 2012, steel casing of the well wall developed cracks in about 6% of the cases. This caused contamination of ground water. In extreme cases methane gas leaked into the ground water and was found coming out of the water taps in the house causing serious fire hazard.

My main concern is water pollution. Technology base in Pakistan is still in the embryonic stage and environmental considerations are ignored at best of times.You are quite correct, ordinary sewage water treatment are not sufficient. . Only the Shale reserves found near the coast such as in Badin should be exploited where seawater can be used. No fracking well should be nearer than 10 kilometres to a residential area.

What I am trying to stress is that in my humble opinion, fracking is not a “Panacea” for a country such as Pakistan.
We are virtually next door to Iran, Qatar & Turkmenistan. Therefore we have relatively easy access to vast reserves of natural gas. Given the choice, I would ban the use of CNG on private cars and spend the funds to exploit Thar coal reserves for producing electricity. This would free up the gas for household users. Short tern gas short fall would be reduced thru LNG imports. Ideally, until such time situation permits import of piped gas from Iran; use of natural gas should be limited to fertilizer production and home use only.

I am also afraid that economic resources required to exploit shale gas are so enormous that it could go the way of Thar coal reserves and the Reckdeq mineral deposits.

 

[RiazHaq]

Here's a Texas news story about Pakistan seeking help of a Pakistani-American oilman in Midland, Tx to develop Pakistani shale oil and gas:

Among those drawn to the Permian Basin is Jalil Abbas Jilani, Pakistan’s ambassador to the United States, who made a brief trip to MidlandWednesday.

“Pakistan has huge oil and gas reserves and we’re looking at this area for investors interested in joint ventures,” explained the ambassador, speaking by phone as he headed to the airport to fly to Houston. He was accompanied by Afzaal Mahmood, general consul for Pakistan stationed in Houston.

Jilani said he was impressed “by the things happening in Midland” and that he was warmly received at the luncheon attended by local oil men, including Don Evans as well as Midland Mayor Jerry Morales and Jose Cuevas, owner of JumBurrito. He said he hopes local businesses will consider participating in what he described as significant opportunities in Pakistan.

It’s estimated Pakistan holds total conventional and unconventional reserves of about 160 trillion cubic feet equivalent.

Anwar, a native of Pakistan, explained that the ambassador was making an “exculpatory” visit to Midland to gauge interest in helping Pakistan develop its unconventional hydrocarbons.

“They have an acute shortage of natural gas. They used to have conventional gas reserves, but with population growth and economic expansion,” they’re experiencing a shortfall, Anwar said.

The U.S. Energy Information Administration cited a Pakistani government report that the country had a natural gas shortfall of 912 billion cubic feet in 2013, though its dry natural gas production has grown by over 80 percent over the last decade to 1,462 Bcf in 2012.

Pakistan ambassador seeks Basin's assistance in developing shale resources - Oil - MyWestTexas.com

 

[RiazHaq]

Edward L. Morse in Foreign Affairs Magazine on declining cost of finding and extracting shale oil and gas fueling the shale revolution:

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.

This powerful combination of indigenous factors will continue to drive U.S. efforts. A further 30 percent increase in U.S. natural gas production is plausible before 2020, and from then on, it should be possible to maintain a constant or even higher level of production for decades to come. As for oil, given the research and development now under way, it is likely that U.S. production could rise to 12 million barrels per day or more in a few years and be sustained there for a long time. (And that figure does not include additional potential output from deep-water drilling, which is also seeing a renaissance in investment.)

Two factors, meanwhile, should bring prices down for a long time to come. The first is declining production costs, a consequence of efficiency gains from the application of new and growing technologies. And the second is the spread of shale gas and tight oil production globally. Together, these suggest a sustainable price of around $5.50 per thousand cubic feet for natural gas in the United States and a trading range of $70–$90 per barrel for oil globally by the end of this decade.

These trends will provide a significant boost to the U.S. economy. Households could save close to $30 billion annually in electricity costs by 2020, compared to the U.S. Energy Information Administration’s current forecast. Gasoline costs could fall from an average of five percent to three percent of real disposable personal income. The price of gasoline could drop by 30 percent, increasing annual disposable income by $750, on average, per driving household. The oil and gas boom could add about 2.8 percent in cumulative GDP growth by 2020 and bolster employment by some three million jobs.

Beyond the United States, the spread of shale gas and tight oil exploitation should have geopolitically profound implications. There is no longer any doubt about the sheer abundance of this new accessible resource base, and that recognition is leading many governments to accelerate the delineation and development of commercially available resources. Countries’ motivations are diverse and clear. For Saudi Arabia, which is already developing its first power plant using indigenous shale gas, the exploitation of its shale resources can free up more oil for exports, increasing revenues for the country as a whole. For Russia, with an estimated 75 billion barrels of recoverable tight oil (50 percent more than the United States), production growth spells more government revenue. And for a host of other countries, the motivations range from reducing dependence on imports to increasing export earnings to enabling domestic economic development.

RISKY BUSINESS?

Skeptics point to three problems that could lead the fruits of the revolution to be left to wither on the vine: environmental regulation, declining rates of production, and drilling economics. But none is likely to be catastrophic.

Hydraulic fracturing, or “fracking” -- the process of injecting sand, water, and chemicals into shale rocks to crack them open and release the hydrocarbons trapped inside -- poses potential environmental risks, such as the draining or polluting of underground aquifers, the spurring of seismic activity, and the spilling of waste products during their aboveground transport. All these risks can be mitigated, and they are in fact being addressed in the industry’s evolving set of best practices. But that message needs to be delivered more clearly, and best practices need to be implemented across the board, in order to head off local bans or restrictive regulation that would slow the revolution’s spread or minimize its impact.

As for declining rates of production, fracking creates a surge in production at the beginning of a well’s operation and a rapid drop later on, and critics argue that this means that the revolution’s purported gains will be illusory. But there are two good reasons to think that high production will continue for decades rather than years. First, the accumulation of fracked wells with a long tail of production is building up a durable base of flows that will continue over time, and second, the economics of drilling work in favor of drilling at a high and sustained rate of production.

Finally, some criticize the economics of fracking, but these concerns have been exaggerated. It is true that through 2013, the upstream sector of the U.S. oil and gas industry has been massively cash-flow negative. In 2012, for example, the industry spent about $60 billion more than it earned, and some analysts believe that such trends will continue. But the costs were driven by the need to acquire land for exploration and to pursue unproductive drilling in order to hold the acreage. Now that the land-grab days are almost over, the industry’s cash flow should be increasingly positive.

It is also true that traditional finding and development costs indicate that natural gas prices need to be above $4 per thousand cubic feet and oil prices above $70 per barrel for the economics of drilling to work -- which suggests that abundant production might drive prices down below what is profitable. But as demand grows for natural gas -- for industry, residential and commercial space heating, the export market, power generation, and transportation -- prices should rise to a level that can sustain increased drilling: the $5–$6 range, which is about where prices were this past winter. Efficiency gains stemming from new technology, meanwhile, are driving down break-even drilling costs. In the oil sector, most drilling now brings an adequate return on investment at prices below $50 per barrel, and within a few years, that level could be under $40 per barrel.

THINK GLOBALLY

Since shale resources are found around the globe, many countries are trying to duplicate the United States’ success in the sector, and it is likely that some, and perhaps many, will succeed. U.S. recoverable shale resources constitute only about 15 percent of the global total, and so if the true extent and duration of even the U.S. windfall are not yet measurable, the same applies even more so for the rest of the world. Many countries are already taking early steps to develop their shale resources, and in several, the results look promising. It is highly likely that Australia, China, Mexico, Russia, Saudi Arabia, and the United Kingdom will see meaningful production before the end of this decade. As a result, global trade in energy will be dramatically disrupted.

A few years ago, hydrocarbon exports from the United States were negligible. But by the start of 2013, oil, natural gas, and petrochemicals had become the single largest category of U.S. exports, surpassing agricultural products, transportation equipment, and capital goods. The shift in the U.S. trade balance for petroleum products has been stunning. In 2008, the United States was a net importer of petroleum products, taking in about two million barrels per day; by the end of 2013, it was a net exporter, with an outflow of more than two million barrels per day. By the end of 2014, the United States should overtake Russia as the largest exporter of diesel, jet fuel, and other energy products, and by 2015, it should overtake Saudi Arabia as the largest exporter of petrochemical feedstocks. The U.S. trade balance for oil, which in 2011 was −$354 billion, should flip to +$5 billion by 2020.

By then, the United States will be a net exporter of natural gas, on a scale potentially rivaling both Qatar and Russia, and the consequences will be enormous. The U.S. gas trade balance should shift from −$8 billion in 2013 to +$14 billion by 2020. U.S. pipeline exports to Mexico and eastern Canada are likely to grow by 400 percent, to eight billion cubic feet per day, by 2018, and perhaps to ten billion by 2020. U.S. exports of liquefied natural gas (LNG) look likely to reach nine billion cubic feet per day by 2020.

Sheer volume is important, but not as much as two other factors: the pricing basis and the amount of natural gas that can be sold in a spot market. Most LNG trade links the price of natural gas to the price of oil. But the shale gas revolution has delinked these two prices in the United States, where the traditional 7:1 ratio between oil and gas prices has exploded to more than 20:1. That makes LNG exports from the United States competitive with LNG exports from Qatar or Russia, eroding the oil link in LNG pricing. What’s more, traditional LNG contracts are tied to specific destinations and prohibit trading. U.S. LNG (and likely also new LNG from Australia and Canada) will not come with anticompetitive trade restrictions, and so a spot market should emerge quickly. And U.S. LNG exports to Europe should erode the Russian state oil company Gazprom’s pricing hold on the continent, just as they should bring down prices of natural gas around the world.

In the geopolitics of energy, there are always winners and losers. OPEC will be among the latter, as the United States moves from having had a net hydrocarbon trade deficit of some nine million barrels per day in 2007, to having one of under six million barrels today, to enjoying a net positive position by 2020. Lost market share and lower prices could pose a devastating challenge to oil producers dependent on exports for government revenue. Growing populations and declining per capita incomes are already playing a central role in triggering domestic upheaval in Iraq, Libya, Nigeria, and Venezuela, and in that regard, the years ahead do not look promising for those countries.

At the same time, the U.S. economy might actually start approaching energy independence. And the shale revolution should also lead to the prevalence of market forces in international energy pricing, putting an end to OPEC’s 40-year dominance, during which producers were able to band together to raise prices well above production costs, with negative consequences for the world economy. When it comes to oil and natural gas, we now know that though much is taken, much abides -- and the shale revolution is only just getting started.


Edward L. Morse | The Shale Revolution Is Here to Stay | Foreign Affairs