ISLAMABAD: The Hydrocarbon Exploration Licensing Policy (HELP), a vital document about way forward to self-sufficiency in oil and gas sector authored by an eminent energy expert Engineer Arshad H Abbasi associated with SDPI has pinpointed that Pakistan authorities have so far ignored the area bordering with India, Rajasthan for exploration and production (E&P) activities for oil and gas deposits knowing the fact that India in its side of border is currently producing 1,75000 barrels per day (BPD). It also raises the red flag asking as to why Pakistan companies are not active for E&P activities in this area since long and if Pakistan’s oil and gas reserves going to Indian side.
The HELP document endorsed and heavily praised, by national and international czars hailing from energy and financial sectors such former Petroleum Ministry Engineer G A Sabri, international consultant for energy and climate change Farrukh Mahmood Mian, MD OGDCL and former additional secretary Mohammad Naeem Malik, former MD Pepco Tahir Basharat Cheema, former finance minister of Pakistan and currently adviser to Punjab government on finance and development Dr Salman Shah, former deputy chairman Planning Commission Dr Akram Sheikh and former OGDCL MD Mohammad Raziuddin, highlighted the fact, saying that on the map of petroleum producing states, the Indian State of Rajasthan was till recently in 2009-10 a backward state with vast stretches of desert. And western Rajasthan gained prominence after the discovery of oil by NOC of India which currently produces 175,000 bpd. The basin, especially the Jaisalmer Basin has resources with a potential of 7.8 billion barrels. India Company Carin is planning to invest an additional $5.4 billion to increase its production to 5bpd. The same company plans to drill more than 450 wells over the next 3 years along the Pakistani border.
The HELP mentions saying that the oil & gas explorations companies of Pakistan have not been active in the area close to the Indo-Pak border, Tatot Block of Rajasthan which is only at 10 kilometers from the border will soon become a major oil field for India. As Pakistan’s companies are not exploring and producing oil & gas in districts Sanghar, Sukkur, Ghotki, Kasur, Bahawalnagar and Rahim Yar Khan, the question arises as to whether ‘Pakistan’s oil and gas migrating to the Indian-side?’ Indeed this should be of primary concern to the prime minister, Ministry of Defence and Ministry of Finance & Ministry of Petroleum.
The PTI government is inheriting an economy mired in multi-pronged crises. Massive unemployment, devaluation of the Pakistani rupee, high inflation are among the challenges it will need to grapple with. One of the fundamental causes of the economic crisis are energy imports. This dependence on energy import has crippled Pakistan. Meeting almost 85 percent of the energy demand through imports weighs heavily on Pakistan’s trade and current account deficit.
To address these challenges on an economic front, Pakistan needs to enhance the domestic production of oil & gas on war-footing by removing the structural constraints. Proven oil & gas reserves are enough to meet national demand and make the country self-sufficient but lack of the conducive policy and regulatory environment hinders the boosting of domestic exploration and production.
The objective of HELP report is to help government make better oil & gas exploration policy for self-reliance in production. It charts out a roadmap for exploration of hydrocarbons to make the country self-sufficient in minimum lead time and set it on a new trajectory of economic growth. The report reviews and highlights shortcomings in petroleum policies and suggests reforms to be able to attain self-sufficiency.
While highlighting indigenous potential of oil and gas, HELP says that the domestic oil and gas sector has enormous potential. The balance recoverable reserves of crude oil of the country as on 30th June, 2016 were calculated at 350.632 million barrels. The total oil resource potential is 27 billion barrels while the indigenous production is 86,032 barrels per day. Further, Pakistan as the largest consumer of the gas has a total resource potential of 282 trillion cubic feet with recoverable reserves estimated at 24 trillion cubic feet and production of almost 4 billion cubic feet per day.
The biggest issue in realising this potential has been a lack of commitment at the national level. As of April 2017, an area of around 361,218.72 square kilometers out of a total sedimentary area of 827,268 sq. km has been under exploration for oil and gas throughout the country. Yet only 27,710 square kilometers located in Khyber Pakhtunkhwa has been explored. This shows that since independence, only 27% of the area of KPK has been explored for oil & gas. Recoverable potential in KPK alone is 2 billion barrels oil and 46 trillion cubic feet gas.
In Balochistan alone, the total proven oil reserves are an estimated 313 million barrels and proven gas reserves are estimated at 29.67 trillion cubic feet. According to another international assessment, Balochistan has 6 billion barrels of oil in onshore/offshore and 19 trillion cubic feet gas reserves. Building a shale oil & gas industry for the future of Pakistan will generate vast investment opportunities, and shale gas exploration and production may transform Pakistan’s economy and revolutionise the existing energy mix within the country. It also mentions that Pakistan’s offshore comprises of the Makran coast and the Indus delta, which is one of the largest basins, comparable to world’s most prolific offshore deltas such as Niger, Mahakam and the Nile.
Geological data is available for the offshore basin but only sixteen exploration wells have been drilled in Pakistan offshore so far and the potential has not yet been identified.
Mentioning about shale oil and gas potential, it also unfolds that in terms of total technically recoverable shale gas reserves, Pakistan stands 19th in the world. It has about 205 TCF technically recoverable reserves. In the USA and Canada, the daily production of Shale Gas is 32 BCF and 4 BCF, whereas in China and Poland, despite heavy utilisation, the production is 600 and 150 million Cubic Feet per day respectively. In India, two oil & gas giants failed to unlock shale gas mainly because of the complex geology and the lack of accurate data.
SDPI report on “Shale Oil & Gas: The Lifeline for Pakistan” launched in 2015, highlights the need and importance of developing shale oil and gas resources in Pakistan. The research report has been compiled by utilising all the available data and has been endorsed by all engineering universities and academia. The expected challenges in exploiting this resource and strategies to minimise the chances of failure have also been discussed in detail. It sketches a complete framework for initiating the exploration process and also highlights the potential to generate economic activity and benefits that can be accrued to thousands of Pakistanis.
The report suggests that the development of shale oil & gas may be sufficient to fulfil the gas and oil demand for the next 50 years. Achieving this self-sufficiency through the development of these resources, the country would be able to eliminating the trade deficit. It also looks at the strong nexus that exist between energy and employment generation. The report suggests that the development of shale oil and gas is more labour intensive as compared to conventional resources, especially during the drilling phase, which can accommodate both skilled and semiskilled labourers. It is estimated that around 750,000 jobs would be generated during the exploration of shale oil and gas, thus offering sustainable livelihoods in least developed areas.