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

[RescueRanger]

Can we offer such sharing?

Don't ask me last time i checked i still work for a living.

 

[Kompromat]

@Argus Panoptes

At current rate of oil consumption, how much forex we can save bu utilizing these deposits?

 

[RiazHaq]

Here are details of PPL-Orion off-shore drilling deal in Pakistan:

Pakistan Petroleum Limited (PPL) and Orion Energy have signed an agreement for undertaking a joint study on the prospects of offshore exploration and will invest millions of dollars in drilling and set up a power plant that will receive gas from Kandhkot gas field.PPL Managing Director and Chief Executive Officer Asim Murtaza and Orion Energy CEO andDirector David M Thomas signed documents here on Friday.

British High Commissioner to Pakistan Adam Thomson and Pakistan Britain Trade and Investment Forum Executive Director Nadim Khan were also present on the occasion.PPL and Orion Energy, headquartered in Singapore with a representative office in the UK, have planned to conduct the study in Indus and Makran offshore areas to determine the hydrocarbon potential there.

They will constitute different teams and earmark resources for the study, which is expected to take around four months. Following the identification of prospective areas, further exploration may get under way.Later, technological partners may be brought in for state-of-the-art data acquisition, processing and identification of potential structures and reservoirs. Subsequent to the study, further exploration and production may require investments of around $100 million.

According to a statement, they will also form a special purpose company for establishing a 20 to 25-megawatt power plant and the capacity will be enhanced to 250MW.In his welcome address, British High Commissioner Adam Thomson said, “Today’s signing is another step towards the UK and Pakistan’s ambitious, joint trade and investment targets. This is a clear signal from UK companies of their wish to do business in Pakistan with Pakistani partners in the energy sector.”

He said investment by any UK company in Pakistan’s energy sector had great importance to the British government. “Two years ago, the prime minister of Pakistan and the British premier mutually agreed to bring the volume of investment and trade to around $2.5 billion by 2015,” he said.
Thomson was of the view that both the countries were following the right track of cooperation and they could do and should exceed the set investment target because both were natural business partners and were already working together in almost every sector of the economy.
In Europe, he said, British companies were leading in supplying energy technology, both in traditional and alternative energy.

Talking briefly about his company, PPL MD Asim Murtaza said PPL was a frontline player in Pakistan’s energy sector with 71% government shareholding in the company. It produces 186,000 barrels of oil per day and covers 24% of energy needs of the country.According to Murtaza, so far 17 offshore exploration attempts have failed, discouraging exploration companies, but the PPL-Orion initiative has revived hopes.About exploration work in Makran region, he said geology of the region was very complex, requiring the use of state-of-the-art technology, which Orion Energy has. At a later stage, exploration activities in Makran will be extended to Indus Delta.Murtaza said Kandhkot gas field could supply 200 million cubic feet per day (mmcfd) of gas, but Guddu power plant was receiving only 100 mmcfd.

Joint venture: PPL, Orion Energy to invest $100m in offshore drilling – The Express Tribune

 

[Kompromat]

@MST

My Indian friend, Australian newspapers calculated 'Total shale oil deposits including non recoverable' which amounts to those 'trillions' of dollars.

Australia's 'actually recoverable' deposits are 17BBL less than Libya's.

Almost 80% of Pakistani territory has been identified as a 'shale basin' with Full KPK,Gilgit baltistan, and Balochistan's some large areas which haven't been assessed yet.

They represent Pakistan 'major' seismic zones,yet to be discovered. Moreover Australian reserves are located in the middle of S.Australia. A barren wasteland with ZERO access to the most critical element needed for shale extraction...'abundant water'.

Pakistan on the other hand my Indian friend has its Shale reserves lying within Kms to, Arabian sea, Indus,Jehlum,Chenab, rivers with the 2nd largest canal water distribution system on earth,making our extraction and transportation more viable.

This reserve is not going to make us a wealthy country but it is our best chance for full industrialization of our semi industrial economy.

 

[Argus Panoptes]

@Argus Panoptes

At current rate of oil consumption, how much forex we can save bu utilizing these deposits?

In rough terms, about one-third of our import bill is for oil, about $15 billion per year. It is a huge drain on our forex reserves. If we can save even half of this amount by utilizing internal resources, it would be a great boost for the economy.

 

[muse]

He said investment by any UK company in Pakistan’s energy sector had great importance to the British government

They are already telling you what to expect - so you know whats going to come your way, don't cry afterwards

 

[surya kiran]

@MST
Pakistan on the other hand my Indian friend has its Shale reserves lying within Kms to, Arabian sea, Indus,Jehlum,Chenab, rivers with the 2nd largest canal water distribution system on earth,making our extraction and transportation more viable.

This reserve is not going to make us a wealthy country but it is our best chance for full industrialization of our semi industrial economy.

Yes, extraction is the first part. Then there has to be a facility which will convert it into utilisable energy. Which is what @RiazHaq saabs post seems to mention. it will definitely reduce burden during emergencies, but will take some time to be fully achievable, say a decade or so to be able to deliver good results.

Also, from whatever I have heard him speak, it seems there is surplus capacity in Pak, hence, its not the number of units generating power, but, the gas/fuel to generate the same. This stems not from changing gas/fuel which is the source for the generation unit, but in addressing the issue of making the fuel available.

Else, what happens is you have one more type of capacity which was built and there is no money to pay the generating unit for the fuel, which today is the problem? Then one will talk about nationalisation of the power sector.

In rough terms, about one-third of our import bill is for oil, about $15 billion per year. It is a huge drain on our forex reserves. If we can save even half of this amount by utilizing internal resources, it would be a great boost for the economy.

This will not be economicall feasible. cause, then what happens to existing plants? They have generation capacity right? Shale will be an additional increase, if it happens. it cannot replace generation from the other plants. This is a systemic cyclical problem. Believe me, the effect of forex will be miniscule, considering Pak will start growing its industrial base over the next 5 years.

 

[RiazHaq]

In rough terms, about one-third of our import bill is for oil, about $15 billion per year. It is a huge drain on our forex reserves. If we can save even half of this amount by utilizing internal resources, it would be a great boost for the economy.

I think Pakistanis have to think long term and have and execute a comprehensive national energy policy to ensure a better future.

Energy consumption in this day and age generally indicates a nation's level of industrialization, productivity and standards of living. Going by this yardstick, Pakistan's 14 million BTUs per capita consumption in 2009 indicates that the country has a long way to go to achieve levels comparable with the world average productivity signified by 71 million BTUs per capita as estimated by US Energy Information Administration for 2009.

Although Pakistan's 14 million BTUs per capita energy use is ahead of Bangladesh's 6 million BTUs and Sri Lanka's 10 million BTUs, it is less than India's 18 million BTUs, and far behind China's 68 million BTUs and Malaysia's 97 million BTUs.

Instead of addressing different pieces of the energy puzzle in an ad hoc fashion under multiple ministries and bureaucracies fighting turf battles, Pakistani policy makers need to look at the big picture for the sake of the nation's future. Nothing short of a holistic approach with a comprehensive energy policy formulated and implemented under a competent and powerful energy czar will do.

Haq's Musings: Comprehensive Energy Policy For Pakistan's Future

 

[Argus Panoptes]

I think Pakistanis have to think long term and have and execute a comprehensive national energy policy to ensure a better future. ...............

I agree, but the chances of both of those things happening are not bright at all. We will continue to lurch from one short term ad hoc knee jerk reaction to the next, hobbling our future as we fall further and further behind other nations.

 

[ajpirzada]

@ajpirzada

Mr Inhouse Economist, whats your view??

my view is to do with its financial viability.. shale gas technology is costly and i am not sure when exactly will we be in a position to invest (or attract investment) enough so as to utilize this resource. if we think about it, its taking us years to develop and exploit thar coal reserves. for now that is probably the best source of energy available to us, given our weak economic state.

now coming towards the ideological debate, the biggest hindrance (in my view) to our energy sector is the government setting the price. regulation and setting the market prices are two very difference things.. regulation means that you do not allow the private sector participants to collude (or becoming a monopoly) when setting the prices hence keeping the overall environment competitive. it is highly inefficient economically and islamicaly unjustifiable to dictate prices to market participants. how does the government know what price to charge? and it is most likely that the market will not clear at these dictated prices thus leaving you with either surpluses or shortages. and in our case it is the shortages.

the kind of investment which is required in today's world is huge and can hardly be undertaken a government in any developing country. the best way is the let the private sector take its course while the government regulates the market behavior.

 

[RiazHaq]

my view is to do with its financial viability.. shale gas technology is costly and i am not sure when exactly will we be in a position to invest (or attract investment) enough so as to utilize this resource. if we think about it, its taking us years to develop and exploit thar coal reserves. for now that is probably the best source of energy available to us, given our weak economic state.

now coming towards the ideological debate, the biggest hindrance (in my view) to our energy sector is the government setting the price. regulation and setting the market prices are two very difference things.. regulation means that you do not allow the private sector participants to collude (or becoming a monopoly) when setting the prices hence keeping the overall environment competitive. it is highly inefficient economically and islamicaly unjustifiable to dictate prices to market participants. how does the government know what price to charge? and it is most likely that the market will not clear at these dictated prices thus leaving you with either surpluses or shortages. and in our case it is the shortages.

the kind of investment which is required in today's world is huge and can hardly be undertaken a government in any developing country. the best way is the let the private sector take its course while the government regulates the market behavior.

Shale gas revolution began a few years ago when an American named George P. Mitchell defied the skeptics and fought his opponents to extract natural gas from shale rock. The method he and his team used to release the trapped gas, called fracking, has paid off dramatically. In 2000, shale gas represented just 1 percent of American natural gas supplies. Today, it is over 30 percent and rising.

US natural gas prices have fallen below $2 per million BTU (approx 1000 cubic feet), about one-sixth of the price Pakistan has agreed to pay for Iranian gas. With over 50 trillion cubic feet of known shale gas reserves in Sindh alone and over 100 TCF in the country, Pakistanis can also enjoy the benefits of cheap and abundant source of energy for decades via the shale gas revolution already sweeping America.

To encourage investment in developing domestic shale gas, Pakistan has approved a new exploration policy with improved incentives as compared with its 2009 policy, a petroleum ministry official said recently. Pakistan Petroleum is now inviting fresh bids to auction licenses to explore and develop several blocks in Dera Ismail Khan (KPK), Badin (Sind), Naushero Firoz (Sind) and Jungshahi (Sind), according to Oil Voice.

Haq's Musings: Pakistan's Energy Security Via Shale Gas Revolution

 

[Argus Panoptes]

..................
US natural gas prices have fallen below $2 per million BTU (approx 1000 cubic feet), about one-sixth of the price Pakistan has agreed to pay for Iranian gas. With over 50 trillion cubic feet of known shale gas reserves in Sindh alone and over 100 TCF in the country, Pakistanis can also enjoy the benefits of cheap and abundant source of energy for decades via the shale gas revolution already sweeping America...................

So why are our officials so keen to proclaim their support for the IP project? Can we afford Iranian gas at those prices? Or is it because our shale gas reserves are wildly overestimated?

 

[ziaulislam]

So why are our officials so keen to proclaim their support for the IP project? Can we afford Iranian gas at those prices? Or is it because our shale gas reserves are wildly overestimated?

problem is who is going to invest in shale gas...PPL,OGDCL dont have technology and neither resources..
shale gas is less attrative because of lesser return..until now the return promised was very low, not anymore but law and order situation isnt bright..

shale gas can only be available if OGDCL/PPL do a joint venture with foreign firms problem is that they are already cash stripped because the govt owns them!..the circular debt has made it even worse

 

[Argus Panoptes]

problem is who is going to invest in shale gas...PPL,OGDCL dont have technology and neither resources..
shale gas is less attrative because of lesser return..until now the return promised was very low, not anymore but law and order situation isnt bright..

shale gas can only be available if OGDCL/PPL do a joint venture with foreign firms problem is that they are already cash stripped because the govt owns them!..the circular debt has made it even worse

The basic point is that we have no money to generate the power that we need using existing or new resources.

 

[RiazHaq]

So why are our officials so keen to proclaim their support for the IP project? Can we afford Iranian gas at those prices? Or is it because our shale gas reserves are wildly overestimated?

You should ask them this question.

As to the shale oil and gas estimates, there's no reason for US EIA professionals to exaggerate data for Pakistan.

The current power load-shedding crisis has its origins in bad agreements signed with IPPs in 1990. It shows that Pak govt officials in charge of energy either lack wisdom and foresight in their decision making, or they are just too incompetent and corrupt to think of the country's needs.

After 1990s deals signed by the PPP govt and endorsed by PML(N), the IPPs built oil-powered inefficient plants because of their low construction costs and short lead times, and the oil price has skyrocketed since these plants were built in 1990s. The result is 18-20 hours of load shedding across most of Pakistan in the scorching summer heat in spite of the fact the taxpayers have shelled out over $14 billions in subsidies to the power sector since 2008.

Haq's Musings: Pakistanis Suffer Load-shedding While Power Companies' Profits Surge