Hold your barrels: EIA report ‘exaggerates’ Pakistan’s shale potential
Experts suggest it is high time to carry out a focused study on shale gas and oil prospectivity.
This is not the first EIA assessment that has come out with such estimates. It made similar assumptions in a report released in 2011.
KARACHI:
The US Energy Information Administration’s (EIA) projection on shale resources that placed Pakistan at the ninth position with regards to shale oil reserves was released on June 10, 2013. Except for industry officials, not many people paid any attention until it appeared in a newspaper earlier this week, heralding a wave of excitement in the energy-starved country.
Report indicates that Pakistan has ‘technically’ recoverable reserves of 105 trillion cubic feet (TCF) of gas and 9.1 billion barrels of oil, enough to feed Islamabad’s energy needs from domestic resources for the next half century.
This is not the first EIA assessment that has come out with such estimates. It made similar assumptions in a report released in 2011.
But there is a catch. In Pakistan’s case, the EIA projection is based on scanty data from an article published in 1986 by Viqarun Nisa Quadri and Shuaib, SM, in the AAPG Bulletin, volume 70.
“The article focuses on the overall petroleum potential of the Southern Indus rather than shale gas and oil, a resource which was not known at that time,” says a leading geoscientist associated with a public-sector petroleum explorer.
“Twenty six years have passed since that article was published and a lot has changed with a number of oil and gas discoveries in the Indus region,” he said.
According to that article, there had been five commercial oil finds and one gas discovery in the conventional Cretaceous-age Goru Formation and three more finds in shallower formations. It also notes gas reserves in Sembar Shale but adds that no productive well was drilled till then.
Since that article came out, over 200 wells have been drilled and 155 oil and gas discoveries have been made in that basin. “As such, both of the EIA analyses can at best be termed highly conjectural and the numbers should be taken with a pinch of salt,” the official said.
Pakistan Petroleum Limited (PPL) is the only company that has tried to estimate shale’s true potential. A couple of months back, it took out a nine-metre long core from shale formation in Bhit Shah X-1 well in Hala block.
The core was sent to a lab in Houston for analysis. “Yes, results are encouraging. But we can’t drill from shale in the X-1 well, which is conventional and has a completely different design and metallurgy,” says Asim Murtaza Khan, Managing Director of the PPL.
To find the exact size of shale resources, many more pilot wells have to be drilled and all the information needs to be pooled together for a thorough analysis, he said.
“There is no denying that we have shale reserves in the country. However, the EIA numbers are exaggerated. It will mislead public and that is last thing we need at this stage.”
As Pakistan struggles to meet its energy needs, there is pressure on exploration and production firms to find fresh reserves.
“And there is a huge difference between technically recoverable and actual reserves. We need to understand that a petroleum discovery should be commercially viable. Otherwise, no one will put money into it,” said Khan.
Experts also point at the sweeping changes in EIA projections. In 2011, it estimated 83 TCF of shale gas in Norway. Petroleum giant Shell Oil Company went in and came out with empty hand; forcing EIA to revise is estimates from 83 TCF to zero in the 2013 report.
“Same thing happened in Poland, which saw a rush of exploration companies and now they are exiting,” said Khan. “The worst thing we need right now is a misplaced perception that we’ll turn into one of the hydrocarbon-rich Gulf States.”
Experts say it was high time to carry out a focused-study based on data available with all the exploration companies as well as petroleum ministry archives by a third party specialising in shale gas and oil prospectivity analysis.
“Otherwise, the planners will continue to rely on EIA reports – though it always sounds good strategically that EIA has ranked Pakistan as ninth in shale oil’s technically recoverable reserves.”
Published in The Express Tribune, August 31st, 2013.
The US Energy Information Administration’s (EIA) projection on shale resources that placed Pakistan at the ninth position with regards to shale oil reserves was released on June 10, 2013. Except for industry officials, not many people paid any attention until it appeared in a newspaper earlier this week, heralding a wave of excitement in the energy-starved country.
Report indicates that Pakistan has ‘technically’ recoverable reserves of 105 trillion cubic feet (TCF) of gas and 9.1 billion barrels of oil, enough to feed Islamabad’s energy needs from domestic resources for the next half century.
This is not the first EIA assessment that has come out with such estimates. It made similar assumptions in a report released in 2011.
But there is a catch. In Pakistan’s case, the EIA projection is based on scanty data from an article published in 1986 by Viqarun Nisa Quadri and Shuaib, SM, in the AAPG Bulletin, volume 70.
“The article focuses on the overall petroleum potential of the Southern Indus rather than shale gas and oil, a resource which was not known at that time,” says a leading geoscientist associated with a public-sector petroleum explorer.
“Twenty six years have passed since that article was published and a lot has changed with a number of oil and gas discoveries in the Indus region,” he said.
According to that article, there had been five commercial oil finds and one gas discovery in the conventional Cretaceous-age Goru Formation and three more finds in shallower formations. It also notes gas reserves in Sembar Shale but adds that no productive well was drilled till then.
Since that article came out, over 200 wells have been drilled and 155 oil and gas discoveries have been made in that basin. “As such, both of the EIA analyses can at best be termed highly conjectural and the numbers should be taken with a pinch of salt,” the official said.
Pakistan Petroleum Limited (PPL) is the only company that has tried to estimate shale’s true potential. A couple of months back, it took out a nine-metre long core from shale formation in Bhit Shah X-1 well in Hala block.
The core was sent to a lab in Houston for analysis. “Yes, results are encouraging. But we can’t drill from shale in the X-1 well, which is conventional and has a completely different design and metallurgy,” says Asim Murtaza Khan, Managing Director of the PPL.
To find the exact size of shale resources, many more pilot wells have to be drilled and all the information needs to be pooled together for a thorough analysis, he said.
“There is no denying that we have shale reserves in the country. However, the EIA numbers are exaggerated. It will mislead public and that is last thing we need at this stage.”
As Pakistan struggles to meet its energy needs, there is pressure on exploration and production firms to find fresh reserves.
“And there is a huge difference between technically recoverable and actual reserves. We need to understand that a petroleum discovery should be commercially viable. Otherwise, no one will put money into it,” said Khan.
Experts also point at the sweeping changes in EIA projections. In 2011, it estimated 83 TCF of shale gas in Norway. Petroleum giant Shell Oil Company went in and came out with empty hand; forcing EIA to revise is estimates from 83 TCF to zero in the 2013 report.
“Same thing happened in Poland, which saw a rush of exploration companies and now they are exiting,” said Khan. “The worst thing we need right now is a misplaced perception that we’ll turn into one of the hydrocarbon-rich Gulf States.”
Experts say it was high time to carry out a focused-study based on data available with all the exploration companies as well as petroleum ministry archives by a third party specialising in shale gas and oil prospectivity analysis.
“Otherwise, the planners will continue to rely on EIA reports – though it always sounds good strategically that EIA has ranked Pakistan as ninth in shale oil’s technically recoverable reserves.”
Published in The Express Tribune, August 31st, 2013.