Pakistan has made promising discoveries of substantial shale gas reservoirs at the pilot well KUC-1 in Hyderabad, Sindh, providing a ray of hope amid an annual 8-9 percent decline in natural gas production in the country.
The Oil and Gas Development Company Limited (OGDCL) initiated this project in 2020, aiming to address Pakistan’s growing energy demands. A study conducted by the United States Agency for International Development (USAID) revealed that Pakistan has more than 3,000 trillion cubic feet (TCF) of shale gas resources across various shale horizons.
Dr. M Saeed Khan Jadoon, adviser to OGDCL on oil and gas exploration and head of the shale gas cell, explained, “We have vertically dug the well and discovered two layers of rocks containing shale gas, and OGDCL experts will further vertically drill up to the third layer in the first week of next month.”
Data collected and analyzed after fracking the first two layers confirmed the presence of abundant shale gas. OGDCL is committed to upgrading its human resources in the shale gas sector, with team members sent to China and the USA for exposure to the latest developments in shale gas exploration techniques.
To facilitate fracking in both vertical and horizontal layers, OGDCL has partnered with Schlumberger, Pakistan. Horizontal drilling in the pilot well is scheduled to commence in three months, with completion expected by August 2024. The entire vertical and horizontal drilling process is estimated to take 3 to 4 years at a cost of $25 million to $30 million.
Dr. Jadoon cited delays due to COVID-19 and floods in the drilling process. Once completed, OGDCL plans to market the well to investors based on data collected from fracking, enabling informed decisions regarding commercial shale gas discovery. Commercial shale gas recovery is capital-intensive, with estimated costs ranging from $10 to $15 per mmBtu. OGDCL, as a national oil company, is taking on this challenge to showcase the actual production potential of shale gas reservoirs in Pakistan, potentially attracting investors.
The success of the pilot well may prompt OGDCL to drill additional pilot wells to further evaluate the feasibility and productivity of shale gas in the region. The Sember Shale, identified as the richest source rock with good thickness, is primarily located in Pakistan’s lower and middle Indus basin.
OGDCL presently contributes about 35,000 bbl/day of oil and 800 MMSCFD of gas, accounting for 47 percent of oil production and 30 percent of gas production in Pakistan. Indigenous production by OGDCL has saved approximately $4 billion and contributed about Rs280 billion to the national exchequer. The company also generates substantial employment and business opportunities in Pakistan while promoting local product usage without compromising quality. However, the current production levels of about 70,000 bbl/day of oil and 3.249 MMSCFD of gas are insufficient to meet the nation’s demand, necessitating oil and gas imports to bridge the supply-demand gap.
