DEVELOPMENT OF UNCONVENTIONAL RESERVOIRS IN PAKISTAN By Dr. M DEVELOPMENT OF UNCONVENTIONAL RESERVOIRS IN PAKISTAN By Dr. M. Saeed Khan Jadoon OGDCL, Islamabad APRIL 11, 2011 SERENA HOTEL ISLAMABAD

PROVOKING THOUHHTS With the nuclear industry in crisis and oil prices on the rise, could the solution to our energy problems be in the ground at home? Daniel yergin on the promise of shale gas. He ," states that the turmoil in the middle east is a "sea change" for the global oil market and that the U.S.A and emerging markets are most economically vulnerable to rising oil prices.

Outline of Presentation Objectives Energy out Look Existing Indigenous Resource International Scenario Conventional & Unconventional Reservoirs Potential of Unconventional Resource Development Model Economic Consideration Summary

UNCONVENTIONAL ENERGY RESOURCE AVAILABILITY OBJECTIVES HOW TO MEET ENERGY REQUIREMENT OF THE COUNTRY UNCONVENTIONAL ENERGY RESOURCE AVAILABILITY DEVELOPMENT PHIL0SPHY

Pakistan Energy Out Look

Pakistan Gas Out Look

Energy Resources Available To Us Indigenous Resources of Oil & Gas Hydroelectric Nuclear Solar & Wind Energy

Primary Energy Supplies By Source

Pakistan Indigenous Natural Reserves

Sectoral Energy Consumption By Source 10

INTERNATIONAL SCENARIO FOR UNCONVENTIONAL RESERVOIR

World Un-Conventional Gas Resource

WORLD UN-CONVENTIONAL GAS 40-50 TCF Pakistan

European Unconventional Reservoir

India Shale Gas & CBM Projects Started work on CBM 1993 Group of experts was formulated to collect and analyze data. 32 BLOCKS Have been given to different companies Now India started Production from CBM Next Few Years, Production will be 38 CM^3/day ONGC had Recent Discovery of Shale Gas in West Bengal

Shale Gas Contribution in USA, 18 % of the Total Production

Advance Resources International USA Gas Projected values from different Sources, 2009

INDIGNEOUS HYDROCARBON RESOURCES

Indigenous Oil & Gas Reservoirs Unconventional Reservoirs Poor reservoir properties have capability of storage but poor Productivity Tight Gas Reservoir Shale Gas Reservoir Coal Bed Methane NOT DEVELOPED YET Conventional Reservoirs Sandstone and carbonate Reservoirs. With good reservoir properties have good capability of storage and Productivity Reasonable Efforts for Exploration Explored area is about 275,000 Sq km 550,000 Sq km is unexplored Current Production Oil: 60000-66000 bbl Gas: 4.15 BCF

Unconventional Reservoir Descriptions Tight Gas Reservoir Mostly Sandstone Reservoir Good storage Capability but poor Producibility. Distributed over Large Area of Pakistan Advance Technology Need to Produce Shale Gas reservoir Exist in Shale Source and Reservoir Good storage Capability but poor Producibility Distributed over Large Area of Pakistan Advance Technology need to Produce

Unconventional Reservoirs COAL BED METHAN (CBM) Gas is generated during Coalification Process Gas Adsorbed on the Coal Very poor conductivity Distributed over Sindh & Punjab Province Word 10 % Coal Deposits are in Sindh Total Deposits are 185 billion tone. Not developed Yet No Conclusive Work

Known Tight Gas Reservoirs 22

Shale Sequence in Pakistan Ghazij Shale Thickness (meters) Vastly Distributed- 100 -1200 Thalar Shale Vastly Distributed – 45 – 184 Samber Shale Vastly Distributed – 500- 600 Chichali Sahle Vastly Distributed – 35 – 130

Ghazij Shale Distribution

Talhar Shale

Chichali Area Ghazij Area Talhar Area

Coal Fields in Pakistan

Gas Potential in these Reservoirs Source: Weatherford 2010

Unconventional Gas Resource Tight Gas 40-50 TCF Ghazig Shale Gas 20-30 TCF Talhar Shale Gas 100 TCF Coal Bed Methane 21 TCF (Recoverable- Cathy Oil Canada) Samber Shale (Moin PPL) 60-80 TCF TOTAL 241-281

Development Challenges Evaluation Uncertainties High Investment Longer Production Time Longer Payout Time High Density of wells Skilled Manpower Environmental Issue Political Stability Will to Accept Challenges Resolvable Success

Availability of Technology In World Vertical & Horizontal well Multilateral Wells Hydraulic Fracturing Stimulation Techniques

Multilateral Wells

DEVELOPMENT PHILOSPHY

Development Model-Integrated Approach GOVT Distribution Companies Manufacturing Industries Power Producer Exploration Companies

Exploration & Production Companies Should Invest to Explore Tight and Shale gas Exploration area for Tight and Shale Gas should be awarded to the companies Price Incentives have been given Freedom of Marketing of Gas to the Consumer

Manufacturing & Power Industries Should have direct access to Energy Producer Should have option of buying gas from Producer & paying Tariff to the distribution company for using the network if required Reference Price should be according to the concession area Distribution Companies should effectively assist for supply of gas to Industries Consortium of Industry units to share the cost of energy.

Cost Effective Buisness Model Exploration Companies- Consortium Work Program for next 3-4 years Drilling of Vertical, horizontal & Multilateral Hydraulic Fracturing/Stimulation jobs Service Providers-Consortium Bring Relevant Technology Efficient Execution of jobs Cost effective Solution Human Resource Development---Serious Consideration

Continue---- Need consortium of industry units for sharing of their cost of energy No Misuse of Freedom No Monopolization of any company weather it is service or distribution companies.

ECONOMIC EVALUATION

Production Challenge Reference: Weatherford 2010

Probable Production Behavior

Economic Model for Tight & Shale Gas (Brown Field ) GIIP: 1 TCF Recoverable Reserves: 240 BCF Number of wells: 25 Failure: 10% Gas Flow Rate: 5MMSCFD Development Time: 2 year Well Capex $: 478 Million Facilities: 50 Million Opex: 147 Million Field Life: 25 year GAS Price: $ 4.90/MMBTU IROR: 15 % Pay back: 8.5 year Royalty &Tex Included

Economic Model for Tight & Shale Gas (Green Field ) GIIP: 1 TCF Recoverable Reserves: 240 BCF Number of wells: 25 Failure: 10 % Gas Flow Rate: 5MMSCFD Development Time: 5 year Well Capex $: 478 Million Facilities: 124 Million Opex: 147 Million Field Life: 25 year GAS Price: $ 6.21/MMBTU IROR: 15 % Pay back: 6.5 years

SUMMARY Enough unconventional Reservoir exist in the country Unconventional Reservoirs are required to be evaluated by collection of more data by initiating Pilot Projects in Shale Gas as earliest as possible. Exploration blocks may be awarded for unconventional reservoirs. Economically, Projects in Shale & Tight Gas looks viable.

Continue---- Human Resource Development to cater the demand of oil companies operating in Pkistan Introduction of consortium concept of E & P companies for the planning of their work Consortium of Service companies for cost effective solution of development of these Reservoirs. Integrated Approach of all the stack holder is required to develop these unconventional Reservoirs

THANKS