Saeed_jadoon Development of Unconventional Reservoirs in Pakistan

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DEVELOPMENT OF UNCONVENTIONALRESERVOIRS IN PAKISTAN

By

Dr. M. Saeed Khan JadoonOGDCL, Islamabad

APRIL 11, 2011SERENA HOTEL ISLAMABAD



PROVOKING THOUGHTS

With the nuclear industry in crisis and oilprices on the rise, could the solution toour energy problems be in the ground athome? Daniel yergin on the promise of

shale gas.

He ," states that the turmoil in the middleeast is a "sea change" for the global oil

market and that the U.S.A and emergingmarkets are most economically vulnerableto 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



HOW TO MEET ENERGY REQUIREMENT

OF THE COUNTRY

UNCONVENTIONAL ENERGY RESOURCEAVAILABILITY

DEVELOPMENT PHIL0SPHY

OBJECTIVES



PakistanEnergy Out Look



PakistanGas Out Look



Energy ResourcesAvailable To Us

Indigenous Resources of Oil & Gas

Hydroelectric

Nuclear

Solar & Wind Energy



Primary EnergySupplies By Source

Oil, 32.1%

Gas, 48.3%

LPG, 0.6%

Coal, 7.6%

Hydro Electricity,10.6%

NuclearElectricity, 0.6% Imported

Electricity, 0.1%



Pakistan IndigenousNatural Reserves

ConventionalGas- 30 TCF

Oil 436, Million bbls

Tight Gas- 40 TCF Coal -185 Billion Tons



Sectoral EnergyConsumption By Source



INTERNATIONAL SCENARIOFOR UNCONVENTIONAL

RESERVOIR



World Un-Conventional Gas Resource



WORLDUN-CONVENTIONAL GAS

40-50 TCFPakistan



European Unconventional Reservoir



India Shale Gas & CBM Projects

Started work on CBM 1993

Group of experts was formulated to collect and analyzedata.

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 Projectedvalues from different Sources, 2009



INDIGNEOUS HYDROCARBONRESOURCES



Indigenous Oil & Gas Reservoirs

Conventional Reservoirs

Sandstone and carbonateReservoirs.

With good reservoir propertieshave good capability of storageand Productivity

Reasonable Efforts forExploration

Explored area is about275,000 Sq km

550,000 Sq km is unexplored Current Production Oil: 60000-66000 bbl Gas: 4.15 BCF

Unconventional Reservoirs

Poor reservoir propertieshave capability of storagebut poor Productivity

Tight Gas Reservoir

Shale Gas Reservoir

Coal Bed Methane

NOT DEVELOPED YET



Unconventional Reservoir Descriptions

Tight Gas Reservoir

Mostly SandstoneReservoir

Good storage Capabilitybut poor Producibility.

Distributed over LargeArea of Pakistan

Advance TechnologyNeed to Produce

Shale Gas reservoir

Exist in Shale

Source and Reservoir

Good storage Capabilitybut poor Producibility

Distributed over Large

Area of Pakistan

Advance Technologyneed to Produce



Unconventional Reservoirs

COAL BED METHAN(CBM)

Gas is generatedduring Coalification

Process

Gas Adsorbed on theCoal

Very poor conductivity

Distributed over Sindh& Punjab Province

Word 10 % CoalDeposits are in Sindh

Total Deposits are 185billion tone.

Not developed Yet

No Conclusive Work



Known Tight Gas Reservoirs



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 Shale Vastly Distributed – 35 – 130



Ghazij Shale Distribution

0

0

0

7 5

7 5

7 5

7 5 75

7 5

1

5 0

1 5 0

1 5 0

15 0 1 5

0

15 0

2 2 5

2 2 5

2 2 5

2 2 5

2 2 5

2 2 5

2 2 5

3 0 0

3 0 0

3 0 0

3 0 0

300

3 0 0

300

3 7 5

3 7 5

3 7 5 3 7 5

375

3 7 5

4 5 0

4 5 0

4 5 0 4 5 0

450

4 5 0

5 2 5

5 2 5

5 2 5

525525

525

6 0 0

6 0 0

6 0 0

6 0 0

6006 0 0

600

6 7 5

6 7 5 675

6 7 5

675

6 7 5

6 75

7 5 0

7 5 0 7 50

7 5 0

750

7 5 0

750

8 2 5

8 2 5

8 2 5

8 2 5

8 2 5

8 2 5

8 25

1275

1 2 7 5

1275

1 2 7 5

1 2 0 0

9 0 0

9 0 0

9 0 0

9 0 0

9 0 0

9 0 0

9 0 0

1200

1 2 0 0

1 2 0

0

1 2 0 0

1 2 0 0

1 2 0 0

1 2 0 0

1 1 2 5

1 1 2 5

112 5

11 25

1 1 2 5

1 1 2 5

1 1 2 5

112 5

1 1 2 5

1125

9 7 5

9 7 5

9 7 5

9 7 5

9 7 5 9 7 5

9 7 5

1050

1 0 5 0

1 0 5 0

1 0 5 0

1 0 5 0

1 0 5 0

1 0 5 0

1 1 2 5

1 1 2 5

1 0 5 0

1 0 5 0

1 0 5 0

1 0 5 0

1050

9 7 5

9 7 5

9 7 5

9 7 5

9 0 0

9 0 0

Dhodak

Pirkoh

LotiZin

Uch

Jhal_Magsi

Sara_West

Badar

Qadirpur

340000 360000 380000 400000 420000 440000 460000 480000 500000 520000 540000 560000 580000 600000 620000 640000 660000

3 0 4 0 0 0 0

3 0 6 0 0 0 0

3 0 8 0 0 0 0

3 1 0 0 0 0 0

3 1 2 0 0 0 0

3 1 4 0 0

0 0

3 1 6 0 0 0 0

3 1 8 0 0 0 0

3 2 0 0 0 0 0

3 2 2 0 0 0 0

3 2 4 0 0 0 0

3 2 6 0 0 0

0

3 2 8 0 0 0 0

3 3 0 0 0 0 0

3 3 2 0 0 0 0

3 3 4 0 0 0 0

3 3 6 0 0 0 0

3 3 8 0 0 0 0

3 4 0 0 0 0 0

3 4 2 0 0 0 0

3 4 4 0 0 0 0

0 5 0 00 1 0 00 0 1 5 0 00 2 0 00 0 2 5 0 00 3 0 00 0 m

1:420000

0751502253003754505256006757508259009751050112512001275

Thickness

Pakistan

Ghazij Shale

Scale

Contour inc 1:420000

75

GHAZIJ SHALE ISOCHORE MAP



Talhar Shale



Ghazij Area

Chichali Area

Talhar Area



Coal Fields in Pakistan



Gas Potential in these Reservoirs

Source: Weatherford 2010



Unconventional GasResource

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

DistributionCompanies

ManufacturingIndustries

PowerProducer

ExplorationCompanies



Exploration & Production Companies

Should Invest to Explore Tight and Shale gas

Exploration area for Tight and Shale Gas should beawarded 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 usingthe network if required

Reference Price should be according to theconcession area

Distribution Companies should effectively assistfor 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 isservice or distribution companies.



ECONOMIC EVALUATION



Production Challenge

Reference: Weatherford 2010



Probable Production Behavior

Brown Field with 8 year development

0

20

40

60

80

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Years of production

G a s M M S C F D



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 &Tax 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 existin the country

Unconventional Reservoirs are required to

be evaluated by collection of more data byinitiating Pilot Projects in Shale Gas asearliest as possible.

Exploration blocks may be awarded for

unconventional reservoirs.

Economically, Projects in Shale & TightGas looks viable.



Human Resource Development to cater the

demand of oil companies operating in Pkistan

Introduction of consortium concept of E & Pcompanies for the planning of their work

Consortium of Service companies for costeffective solution of development of theseReservoirs.

Integrated Approach of all the stack holder isrequired to develop these unconventionalReservoirs

Continue----



THANKS

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Saeed_jadoon Development of Unconventional Reservoirs in Pakistan