OGDCL, PPL join forces to explore shale gas, oil

ISLAMABAD: The state-owned companies Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL) are finalizing a joint pilot project to drill shale gas and oil wells in various parts of the country, especially Balochistan, sources said on Monday.

The sources told APP that preparations are in the final phase. The project draft will be submitted to the ministry of petroleum and natural resources for the approval, they said.

Initially, they said the companies will start exploration activities in the selected areas of Balochistan, Sindh and Khyber Pakhtunkhwa after getting a go-ahead from the ministry. Following identification of massive resources of the shale gas and oil last year, they said OGDCL and PPL were tasked to launch the project aimed at tapping the natural fuel and assess its consequent price.

Both the companies are making arrangements to execute the project at the earliest, they added. A study, completed in cooperation with USAID in 2015, confirmed the presence of 10,159 trillion cubic feet (TCF) shale gas and 2,323 billions of stock tank barrels (BSTB) shale oil.

They said there are 188 TCF gas and 58 BSTB oil technically recoverable resources, while the risky technically recoverable resources stood at 95 TCF gas and 14 BSTB oil as per the study. They said the study covered lower and middle Indus Basin, which geographically spread over Sindh, southern parts of Punjab and eastern parts of Balochistan.

Total area under the study was 271,700 kilomerets, 33 percent of the total sedimentary area of the country. Under the programme, the sources said a detailed analysis, including laboratory analysis on shale cores and cuttings, of 124 wells were carried out.

Objectives of the study were to validate the initial findings of shale gas resource estimate, assess availability of required technology and infrastructure for shale gas operations and formulate guidelines for the shale gas policy.

The study further confirmed that basic technology required for shale gas exploration (horizontal drilling and hydraulic fracturing) was available in the country and used for conventional and tight gas reservoirs.

The shale gas is new phenomenon worldwide and so far only US shale was proved as commercially viable. The sources said shale gas exploration and production is capital extensive, around 10 times higher than the conventional oil and gas. –APP

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They said the items, which are subject to sales tax at the rate of zero percent under the latest notification, should not be subject to further tax.  Early this month, the FBR issued a clarification, which, according to the tax experts, means that zero-rate supply would too be subject to further tax. “FBR should re-visit its clarification relating to further tax on zero-rated goods supplies under SRO 1125,” Haroon remarked.