The oil & gas industry in Pakistan is taking a new direction under the leadership of the new government that has developed “a very aggressive road map” for the exploration & production industry.
“We are going through an aggressive exploration programme to extract each one molecule of hydrocarbons,” Zahid Muzaffar, adviser to the prime minister on petroleum and natural resources, told the 21st World Petroleum Congress in Moscow.
He admitted that the process was challenging as there are “inefficiencies in seismic processing” and Pakistan is looking for partnerships and the latest technology to help to address the issue.
“We are inviting any E&P company to come and participate in joint ventures with our two state-owned companies – Oil & Gas Development Company (OGDCL) and Pakistan Petroleum (PPL),” said Muzaffar.
The government is keen to attract international investment in exploration is also seeking partners to develop its low Btu (British thermal unit) gas fields that will likely be used for power generation projects.
Partners are also being sought for Pakistan's shale gas opportunities, to participate in existing enhanced oil recovery initiatives and to help develop marginal fields on a fast-track basis.
The government has moved with the 'unconventional' times and is well aware of the potential for shale gas, coal bed methane and tight gas in Pakistan and foreign participation is welcome in all these sectors.
The US Energy Information Administration estimated Pakistan's technically recoverable shale gas potential at 105 trillion cubic feet and regional studies have already identified sweet spots that warrant further investigation.
PPL believes that its own domestic acreage has high shale gas potential and pilot wells are planned to be drilled this year and in 2015, with hopes these will be followed by new production, according to managing director Asim Khan.
Tight gas is also of interest to Pakistan with prognosticated reserves of 34 Tcf of gas, some of which is also believed to be located on PPL-operated acreage. The state-owned company is also a joint venture partner in Polish state player PGNiG's tight gas development, the first such project in Pakistan.
Meanwhile resource studies have been performed on the nation's coal-bed methane potential and PPL said there are expected resources of between 5 and 10 Tcf alone on its southern Sindh assets.
The aim is to start a pilot CBM scheme in the next three years with well design and planning first on the agenda.
The law recently changed so that CBM now comes under the auspices of provincial governments rather that the federal government.
Pakistan's energy demand is predicted to increase by 4.5% per annum, driven mainly by the industrial and transport sectors, and is forecast to double in 2028 compared to last year.
Indigenous production today is 4.1 billion cubic feet per day of natural gas and just over 100,000 barrels per day of oil, which is insufficient to cater for domestic demand in a supply gap that is only expected to worsen in the coming years.
Economic indicators in Pakistan are said to have improved over the past eight months making the nation a more attractive investment destination and the government is hoping that foreign players will come to explore and exploit its oil & gas assets.
Despite the high hopes of boosting indigenous production, the burgeoning energy supply/demand gap leaves Pakistan with an increasingly onerous oil import bill and trying to also secure gas imports.
A long-awaited liquefied natural gas import project – the nation's first - is now in the construction phase and Muzaffar said that pipeline gas imports also remain on the table.
“We have not given up on the Iran [to Pakistan] pipeline,” said Khan.
In tandem with the upstream drive on its home territory, PPL is looking to boost its international upstream portfolio, the company already has three such assets – two in Yemen and one in Iraq.
However, Khan said that producing indigenous hydrocarbons works out between 30% and 40% cheaper than production coming from overseas.