RESERVOIRS IN DEVELOPMENT OF UNCONVENTIONAL PAKISTAN By Nighat Seema Karachi July 15, 2013 Gulshan-e-HadeedPROVOKING THOUHHTS O With the nuclear industry in crisis and oil prices on the rise, could the solution to our energy problems be in the ground at home? Daniel yergin on the promise of shale gas. O He ," states that the turmoil in the middle east is a "sea change" for the global oil market and that the U.S.A and emerging markets are most economically vulnerable to rising oil prices.Outline of Presentation Objectives Energy out Look Existing Indigenous Resource International Scenario Conventional & Unconventional Reservoirs Potential of Unconventional Resource Development Model Economic Consideration Summary VVVVVVVVVOBJECTIVES > HOW TO MEET ENERGY REQUIREMENT OF THE COUNTRY » UNCONVENTIONAL ENERGY RESOURCE AVAILABILITY » DEVELOPMENT PHILOSPHYPakistan Energy Out Look 276 ~=—=—=emand (High) 242 ome EAR ELIDA cnn 207 273 2 1380 1.04 0.69 0.35 ~ 2008 2010 2012 2014 2016 2018 2020 2022Pakistan Gas Out Look Z Imports (LNG/Pipeline) a 8 63 Mae Supply (local) = Demand-Il 58 Z Dernand-| Ae es 298 5 Imports (LNG/Pipeline) =o a4 322 3 24 2 16 4 8 200827010301 29 014 == 2016 == 08 2020 2022Energy Resources Available To Us O Indigenous Resources of Oil & Gas O Hydroelectric O Nuclear O Solar & Wind EnergyPrimary Energy Supplies By Source fT EEEEE—E—— Nuclear Hydro Electricity, 0.6% Electricity, 10.6% Imported Electricity, 0.1% Coal, 7.6% LPG,0.6%Pakistan Indigenous Natural Reserves Conventional Gas- 30 TCF Tight Gas- 40 TCF Coal -185 Billion TonsSectoral Energy Consumption By Source OIL CONSUMPTION GAS CONSUMPTION “Total: 29.32 Millon TOEINTERNATIONAL SCENARIO FOR UNCONVENTIONAL RESERVOIRWorld Un-Conventional Gas Resource ae BE Tight Gas (16,000 Tcf) 42,000 4 10,000 = Coalbed Methene (9,000 Tcf) Hs 8,000 i i == = 6,000 }~ N&S Europe FSU ‘Es China Asia South 2,000 = 4,000 America rica Pacific AsiaWORLD UN-CONVENTIONAL GAS ite Kazakhstan eer LO eee — eon Po fy ele ence Gas-in-Place (TCF) CBM [56,300 Tight Gas eeeEuropean Unconventional Reservoir shIndia Shale Gas & CBM Projects Started work on CBM 1993 Group of experts was formulated to collect and analyze data. 32 BLOCKS Have been given to different companies Now India started Production from CBM Next Few Years, Production will be 38 CM“*3/day ONGC had Recent Discovery of Shale Gas in West BengalShale Gas Contribution in USA, 18 % of the Total Production 12 10 Haynesvile 1.6 Marcellus or 8 Woodford 07 Fayetteville 1.8 Barnett 02 46 «48 6 Other og oe 08 —=——=s=n~ g Annual Production (Dry, Bdf/d) ° 2000 © 2001-2002 2003S 2004-2008 ©2006 «= 2007-2008 ©=— 20092010 Nother Mlbamett MFayetteville MWoodford | Marcellus MlHaynesville Source: Advanced Resources Intemational (2010)Advance Resources International USA Gas Projected values from different Sources, 2009 ouSG8BRB8RS aS Unconventional Gas Production (Bcfd) 2008 2010 2012 2014 2016 2018 2020INDIGNEOUS HYDROCARBON RESOURCESIndigenous Oil & Gas Reservoirs Conventional Reservoirs Unconventional Reservoirs Sandstone and carbonate » Poor reservoir properties Reservoirs. have capability of storage but poor Productivity With good reservoir properties have good capability of storage Sa and Productivity > | Tight Gas Reservoir Reasonable Efforts for : Shale Gas Reservoir Exploration ™ Explored area is about Coal Bed Methane 275,000 Sq km SS SS eS Sn SSE 550,000 Sq km is unexplored q Current Production Oil: 60000-66000 bbI >» NOT DEVELOPED YET Gas: 4.15 BCFUnconventional Reservoir Descriptions Tight Gas Reservoir Mostly Sandstone Reservoir Good storage Capebillty but poor Producibility. Distributed over Large Area of Pakistan Advance Technology Need to Produce Shale Gas reservoir >» Exist in Shale >» Source and Reservoir » Good storage Capabilit but poor Producibility >» Distributed over Large Area of Pakistan » Advance Technology need to ProduceUnconventional Reservoirs O COAL BED METHAN (CBM) » Gas is generated during Coalification Process > Gas Adsorbed on the Coal » Very poor conductivity >» Distributed over Sindh & Punjab Province v Word 10 % Coal Deposits are in Sindh Total Deposits are 185 billion tone. Not developed Yet No Conclusive WorkKnown Tight Gas Reservoirs — aren Karachi ns o 200kmShale Sequence in Pakistan eee > Ghazij Shale Thickness (meters) " Vastly Distributed- 100 -1200 >» Thalar Shale " Vastly Distributed — 45 - 184 >» Samber Shale " Vastly Distributed — 500- 600 » Chichali Sahle = Vastly Distributed — 35-130Ghazij Shale DistributionTalhar shaleQuerTa JANDRAN SI <= BALUCHISTA. Talhar AreaCoal Fields in Pakistan Mehsana CBM ProjectGas Potential in these Reservoirs Area: 160 acres Thickness: 10 feet B-0% Temperature: 100 F 28% Ash Pressure: 1,600 psi @-4% B-1% 14% TOC 0.84 Bef} 0.85 Be! -4% 0.31 = | | Tight Gas. Tight Gas Shale Coal Sands Sands Gas Source: Weatherford 2010Unconventional Gas Resource >» Tight Gas 40-50 TCF » Ghazig Shale Gas 20-30 TCF > Talhar Shale Gas 100 TCF > Coal Bed Methane 21 TCF (Recoverable- Cathy Oil Canada) v Samber Shale (Moin PPL) 60-80 TCF TOTAL 241-281Development Challenges » Evaluation Uncertainties » High Investment >» Longer Production Time >» Longer Payout Time f==>) Resolvable ==) Success >» High Density of wells >» Skilled Manpower >» Environmental Issue >» Political Stability > Will to Accept ChallengesAvailability of Technology In World Vertical & Horizontal well Multilateral Wells Hydraulic Fracturing Stimulation TechniquesEarly Horizontal Well Completion Practices Stage 3 Stage 2 Stage 1Multilateral Wells | | | Baker Oil Tools Dual Stacked Trilateral Fork ee Herringbone Backbone and Rib RadialDEVELOPMENT PHILOSPHYDevelopment Model-Integrated Approach [eal _ SS =Exploration & Production Companies Should Invest to Explore Tight and Shale gas Exploration area for Tight and Shale Gas should be awarded to the companies Price Incentives have been given Freedom of Marketing of Gas to the ConsumerManufacturing & Power Industries Vv Should have direct access to Energy Producer Should have option of Buying g gas from Producer & paying Tariff to the distribution company for using the network if required Reference Price should be according to the concession area Distribution Companies should effectively assist for supply of gas to Industries Consortium of Industry units to share the cost of energy.Cost Effective Buisness Model O Exploration Companies- Consortium >» Work Program for next 3-4 years ¢ Drilling of Vertical, horizontal & Multilateral e¢ Hydraulic Fracturing/Stimulation jobs >» Service Providers-Consortium e¢ Bring Relevant Technology ¢ Efficient Execution of jobs ¢ Cost effective Solution > Human Resource Development---Serious ConsiderationContinue- >» Need consortium of industry units for sharing of their cost of energy >» No Misuse of Freedom >» No Monopolization of any company weather it is service or distribution companies.ECONOMIC EVALUATIONGas Rate, MMscfiD 10 Production Challenge Absolute Conductivity 800 Absolute Permeability - Thickness Product 5.000 10,000 16,000 Elapsed Time, days Reference: Weatherford 2010 20.000Gas MMSCF 80 60 40 20 Probable Production Behavior Brown Field with 8 year development 1 2.3.4 5 6 7 B 9 1011 1213 14 15 16 17 18 19 20 21 22 23 24 25 Years of productionEconomic Model for Tight & Shale Gas (Brown Field ) VVVVVVVVVVVV VV GIIP: Recoverable Reserves: Number of wells: Failure: Gas Flow Rate: Development Time: Well Capex $: Facilities: Opex: Field Life: GAS Price: IROR: Pay back: Royalty &Tex Included 1 TCF 240 BCF 25 10% 5SMMSCFD 2 year 478 Million 50M n 147 Million 25 year $ 4.90/MMBTU 15 % 8.5 yearEconomic Model for Tight & Shale Gas (Green Field ) VVVVVVVVVVVVV GIIP: Recoverable Reserves: Number of wells: Failure: Gas Flow Rate: Development Time: Well Capex $: Facilities: Opex: Field Life: GAS Price: IROR: Pay back: 1 TCF 240 BCF 25 10 % 5MMSCFD 5 year 478 Million 124 jon 147 Million 25 year $ 6.21/MMBTU 15 % 6.5 yearsSUMMARY » Enough unconventional Reservoir exist in the country » Unconventional Reservoirs are required to be evaluated by collection of more data by initiating Pilot Projects in Shale Gas as earliest as possible. >» Exploration blocks may be awarded for unconventional reservoirs. » Economically, Projects in Shale & Tight Gas looks viable.Continue---- » Human Resource Development to cater the demand of oil companies operating in Pkistan » Introduction of consortium concept of E & P companies for the planning of their work > Consortium of Service companies for cost effective solution of development of these Reservoirs. > Integrated Approach of all the stack holder is required to develop these unconventional ReservoirsTHANKS