ISLAMABAD: State-run Oil & Gas Development Company Ltd (OGDCL) on Monday announced to have started drilling of first shale gas well in Hyderabad for exploration of unconventional hydrocarbon deposits.

The company said in a statement that it had technically planned to drill the well, named KUC-01, in two phases.

“The first well is planned to be drilled in vertical section and fracturing operations will be carried after reservoir evaluation,” it said, adding that the drilling operations commenced on Dec 14.

Based on the outcome of the reservoir evaluation and fracturing job, further technical evaluations will be carried out that will decide entering the second phase which will include drilling a horizontal well section and further frac operations, the company said.

This is the “first well being drilled to explore unconventional shale gas and estimated chance of success (COS) for commercial hydrocarbon production at this point in time is about 10pc,” the company said apparently for expectation management because of the recent unwanted hype over an offshore exploration well – Kekra 1 – and its unsuccessful results.

It said the KUC-01 is a pilot shale gas project and one of the key objectives was to gather maximum information on prospects of shale gas and to ascertain the possibilities of the shale gas development in Pakistan. The OGDCL has the complete operatorship of the said well.

According to a 2015 assessment by the US Energy Information Administration (USEIA), Pakistan had confirmed recoverable reserves of around 200 trillion cubic feet (TCF) of natural gas and around 58 billion barrels of oil in its shale structure — many times larger than existing conventional gas reserves of around 20 TCF and 385 million barrels of oil.

However, the production cost was estimated by the state-owned exploration firms to be over $10 per million British Thermal Unit — considered at the time as economically unviable because of lower global oil prices.

The USEIA had reported in April 2011 the presence of 206 TCF shale gas in lower Indus Basin out of which 51 TCF was termed technically recoverable.

However, in June 2013 the USEIA revised the shale gas resource in Pakistan at 586 TCF, out of which 105 TCF was tipped as risked technically recoverable and also included 9.1bn barrels of shale oil risked technically recoverable out of 227bn barrels shale oil in place.

Published in Dawn, December 17th, 2019