Oil & Gas Prospects of Pakistan in the backdrop of Current Energy Scenario –Hopes for the Future, a Realistic Picture

IEP - PAPG Institute of Engineers, Pakistan09 July 2011

Moin Raza Khan – General Manager Exploration

TALK OUTLINE

Global Energy Overview & Future Prediction World Oil & Gas Discoveries and Production trend Energy consumption and production

Energy Resources Overview – Pakistan Generalized Hydrocarbon presence and Exploratory drilling Pakistan E&P – current situation Energy consumption & future energy demands Oil and Gas creaming curve Reserves and Production graphs

Hopes for the Future Conventional resources in Pakistan Unconventional resources in Pakistan

Present & Future Scenarios in a Nut Shell…

Global Energy Overview

World Energy Overview

We are faced with difficult challenge of sustaining the E&P growth in line withworld’s growing demand of Energy

World is producing ~30 Bbo of Oil and ~105 Tcf of Gas per yearo Demand expected to growing at ~1.2% per yearo Only about half of produced reserves being replaced by Exploration

Most giants/super giants are aging

Most Production by NOCs (Saudi Arabia, Kuwait, Iran, Iraq, Libya, Mexico,Venezuela & Russia etc)

Most petroleum provinces have attained maturity – More Effort => LittleReserves

Most recent big discoveries in Deep water offshore, not enough to catch up

Efforts are underway to go unconventional towards exploration & production

Source: Exxon Mobil Corporation – 2009 Summary Annual Report

Future Prediction by Year 2030……

By year 2030 total demand tobe about 100 million barrels oilper day

The global energy mix will lookvery similar

Resources are adequate tosupport global demand growth.Access along with Technologyare important in all aspects ofour energy challenges

Still considered the safestresource, viz recent nucleardisaster in Japan

Source: Exxon Mobil Corporation – 2009 Summary Annual Report

MMboed

350

300

250

200

150

100

50

World’s Oil Discovery / Production Trend

World Oil R/P Vs Production Share (1 of 2)

MG4 Un

MG4 Unre

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MG4 Unreg

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d Tri

MG4 Unre

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M

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ersion

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ersion

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ersion

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ersion

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l Vers

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ersion

MG4 U

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ersion

MG4 U

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tered T

rial V

ersion

MG4 U

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V

ersion

MG4 U

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ered T

rial V

ersion

MG4 U

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n MG4 U

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rial V

ersion

MG4 U

nr

Unreg

istere

d Tria

l Vers

ion M

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g

stered T

rial V

ersion

MG4 U

nreg

Trial V

ersion

MG4 U

nreg

ersion

MG4 U

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MG4 U

nreg

Unre

g

20

30

40

50

60

70

80

90

2 4 6 8 10 12 14 16

AzerbaijanOman

EgyptMalaysiaEcuadorAustralia

Syria

YemenItaly

Production Share (%)

0

R/P

0

10

100

SaudiArabia

Russian Federation

US

Iran

China

Mexico

Canada

UAE

Kuwait

Venezuela*

Iraq*

Norway

Nigeria

BrazilAngola

Libya

Algeria

UK

Kazakhstan

Qatar

Indonesia

India

Argentina

Colombia

Sudan

Other Europe & EurasiaEquatorialGuinea

Vietnam

DenmarkThailand

Gabon

Other AsiaPacificTurkmenistan

Brunei

Other S.& Cent. AmericaTrinidad& Tobago

Chad

Peru

UzbekistanRomania

Tunisia

Other AfricaOther Middle East

Annual Production ~ 1.5 Billion bbl

* Iraq & Venezuela R/P >100

Rem

aini

ng Y

ears

of P

rodu

ctio

n

World Oil R/P Vs Production Share (2 of 2)

MG4 Un

MG4 Unre

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MG4 Unre

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ersion

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ersion

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ersion

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ersion

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ial V

ersion

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20

30

1 2

Production Share (%)

0

R/P

0

10 Indonesia

AzerbaijanIndia

Oman

Egypt

Malaysia

Argentina

Colombia

EcuadorAustralia

Other Europe & Eurasia

Syria

Equatorial Guinea

Yemen

Denmark

Thailand

Rep. of Congo

Other Asia Pacific

Turkmenistan

Brunei

Other S.& Cent. America

Trinidad & Tobago

Chad

Peru

Italy

UzbekistanRomania

Tunisia

Other AfricaOther Middle East

Annual Production ~ 0.3 Billion bbl

Rem

aini

ng Y

ears

of P

rodu

ctio

n

World’s Gas Discovery / Production TrendD

isco

vere

d V

olum

es (

tcf)

World Gas R/P Vs Production Share (1 of 2)

MG4 Un

MG4 Unre

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MG4 Unre

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ersion

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ersion

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ersion

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ersion

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ersion

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ial V

ersion

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ter

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on M

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ersion

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nregis

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MG4 U

nregis

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Unre

gister

ed

tered

20

30

40

50

60

70

80

90

2 4 6 8 10 12 14 16 18 20

Trinidad& Tobago

Bangladesh

Bolivia

Brazil

Denmark

ColombiaItaly

Other S. & Cent. AmericaOther Middle East

Poland

Production Share (%)

0

R/P

0

10

100

Russian Federation

USA

Canada

Iran*

Norway

Algeria

Saudi Arabia

Qatar*

China

Indonesia

UK

Netherlands

Turkmenistan

Malaysia

Uzbekistan

Egypt

Mexico

UAE*

Argentina

Australia

Papua New Guinea*

Nigeria*Venezuela*

India

Kazakhstan

Thailand

Oman

Ukraine

Libya

Azerbaijan

Other Asia Pacific

BahrainGermany

Kuwait*

Myanmar

Brunei

Romania

Other Europe & Eurasia

Vietnam

Syria

Pakistan

Venezuela, Iran, Kuwait, Qatar, UAE, Nigeria & Papua New Guinea with R/P >100

Annual Production ~ 5 Tcf

Rem

aini

ng Y

ears

of P

rodu

ctio

n

World Gas R/P Vs Production Share (2 of 2)

MG4 Un

MG4 Unre

giste

MG4 Unre

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i

MG4 Unre

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ial Vers

MG4 Unre

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M

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ersion

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ersion

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on M

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ial V

ersion

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ersion

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tered

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Version

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nregis

t

n M

G4 Unre

gister

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ial V

ersion

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nregi

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gister

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ial Vers

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Trial

Version

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on M

G4 Unre

gist

ersion

MG4 U

nregis

t

MG4 U

nregis

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Unre

gist

20

30

40

50

60

1 2 3 4

Production Share (%)

0

R/P

0

10

Norway

Algeria

China

Indonesia

UK

Netherlands

Malaysia

Uzbekistan

Egypt

Mexico

ArgentinaTrinidad & Tobago

India

Thailand

Oman

Ukraine

BangladeshOther Asia Pacific

Bolivia

Brazil

Bahrain

Germany

Myanmar

Brunei

Romania

Other Europe & Eurasia

Denmark

ColombiaItaly

Other S. &Cent. America

Syria

Other Middle East

Poland

Pakistan

Annual Production ~ 2 Tcf

Rem

aini

ng Y

ears

of P

rodu

ctio

n

Production and Consumption of Oil

Production 3820.5 mto Consumption 3882.1 mto

Courtesy of BP

Production and Consumption of Gas

Production 2696 mtoe Consumption 2653.1 mtoe

Courtesy of BP

Production and Consumption of Coal

Production 3408.6 mtoe Consumption 3278.3 mtoe

Courtesy of BP

Energy Resources Overview - Pakistan

Area under Exploration: 278,475 sq km (134 ELs)

Area under Exploration Application: 72,398 sq km (36 ELs)

Average Production:

Oil: 65,333 bbl/d

Gas: 3,893 MMcf/d

Active Exploration Companies:

Operator: 28 (Foreign: 17 & Local: 11)

Non Operator: 30 (Foreign: 24 & Local: 6)

Active Seismic Crews: 8

Active Rigs: 25

Current Exploration Activities(May, 2011)

55% OF OIL PRODUCTION

80% OF GAS PRODUCTION45% OF OIL PRODUCTION

Indigenous natural gas currently supplies almost 50% of Pakistan’s energy needs …

Pakistan - Future Energy Demand Supply Deficit

Coal lmports

137.6 (demand)

33.5 (local)

88.5(supply)

Nuclear

Local Coal

Projected indigenous gas supply

(Source: Ministry of Petroleum)

Projected natural gas demand at

4.5% GDP growth

(2.5 bcfd) (8 bcfd)

Source: PIP – Energy Outlook April 2011

Generalized Basin-wise Hydrocarbon Presence

MIDDLE, LOWER &OFFSHORE INDUS

0

5

10

15

20

25

30

35

40

1947 1957 1967 1977 1987 1997 2007

Wells

Discoveries

Pakistan – Exploratory Wells Vs Discoveries(1947 – 2010)

Years

No.

of W

ells

717: Last Well Jherruck B-1245: Last Discovery Makori East-01

Total Well (1947 – 2010)No. of Exploratory Wells : 717No. of Discoveries : 245

Success Ratio = 1 : 3

Dec, 2010

Pre-

Paki

stan

Per

iod

(186

6-19

47)

Suc

cess

Rat

io 1

: 17

Expl

orat

ory

Wel

ls :

62

D

isco

verie

s : 4

21

Pakistan Exploratory Wells DensityDec, 2010

Total Exploratory Wells:717 (1947 to Dec, 2010)

o Kohat-Potwar Basin in the North

o Middle Indus Basin

o Lower Indus Basin in South (Density increased exponentially after Khaskelidiscovery in 1981)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

Years

Origi

nal R

eser

ves (

MMBO

E)

Dhulian

BalkassarJoyamir Meyal

AdhiDhodak

PindoriChanda

MakoriManzalai

DhurnalMazari, FimkassarTando AlamKhaskheli

MariUchSui

Adhi, DhodakPirkoh

LotiDakhni

Qadirpur KandraKadanwari

Zamzama,Bhit, Sawan,Miano

Mari deep

Manzalai,Makori

OilGas

Oil & Gas Creaming Curve of PakistanNumber of Discoveries increases while the size decreases with time…..

…...During last 10 years Pakistan has replaced 78% of its oil reserves… thanks to Manzalai, Mela & Nashpa

MG4 Un

MG4 Unre

giste

MG4 Unre

gister

ed Tri

MG4 Unreg

istere

d Tria

l Vers

MG4 Unre

gister

ed Tria

l Vers

ion M

MG4 Unre

gistered

Trial V

ersion

MG4 U

nre

MG4 Unreg

istere

d Tria

l Vers

ion M

G4 Unre

gistere

MG4 Unre

gistered

Trial V

ersion

MG4 U

nregis

tered T

rial

MG4 Unre

gistered

Trial V

ersion

MG4 U

nregist

ered T

rial V

ersio

MG4 Unre

gistered T

rial V

ersion

MG4 U

nregist

ered T

rial V

ersion

MG4

MG4 Unreg

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d Tria

l Vers

ion M

G4 Unre

gister

ed Tria

l Versi

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gi

MG4 Unregis

tered

Trial V

ersion

MG4 U

nregis

tered Tria

l Versi

on M

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d

MG4 Unreg

istere

d Tria

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gister

ed Tria

l Versi

on M

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gistered

Trial V

MG4 Unre

gistered

Trial V

ersion

MG4 U

nregist

ered T

rial V

ersion

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nregis

tered

Trial V

ersion

G4 Unre

gister

ed Tria

l Vers

ion M

G4 Unreg

istere

d Tria

l Vers

ion M

G4 Unre

gistered

Trial V

ersion

MG4 U

gistered

Trial V

ersion

MG4 U

nregist

ered T

rial V

ersion

MG4 U

nregis

tered

Trial V

ersion

MG4 U

nregis

t

d Tria

l Vers

ion M

G4 Unre

gister

ed Tria

l Versi

on M

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gistered

Trial V

ersion

MG4 U

nregist

ered T

r

Vers

ion M

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istere

d Tria

l Vers

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gistered

Trial V

ersion

MG4 U

nregis

tered T

rial V

er

on M

G4 Unre

gistered T

rial V

ersion

MG4 U

nregist

ered T

rial V

ersion

MG4 U

nregis

tered

Trial V

ersion

Unreg

istere

d Tria

l Vers

ion M

G4 Unre

gistered

Trial V

ersion

MG4 U

nregis

tered T

rial V

ersion

MG4 U

n

istere

d Tria

l Vers

ion M

G4 Unre

gister

ed Tria

l Versi

on M

G4 Unre

gistered T

rial V

ersion

MG4 U

nregist

e

Trial V

ersion

MG4 U

nregist

ered T

rial V

ersion

MG4 U

nregister

ed Tria

l Vers

ion M

G4 Unre

gistered

Tri

ersion

MG4 U

nregist

ered T

rial V

ersion

MG4 U

nregis

tered

Trial V

ersion

MG4 U

nregis

tered Tria

l Vers

MG4 U

nregis

tered T

rial V

ersion

MG4 U

nregist

ered T

rial V

ersion

MG4 U

nregis

tered Tria

l Versi

on M

Unre

gistered

Trial V

ersion

MG4 U

nregis

tered T

rial V

ersion

MG4 U

nregist

ered T

rial V

ersion

MG4 U

nre

tered

Trial V

ersion

MG4 U

nregis

tered Tria

l Versi

on M

G4 Unre

gistere

d Tria

l Vers

ion M

G4 Unreg

Trial V

ersion

MG4 U

nregis

tered T

rial V

ersion

MG4 U

nregist

ered T

rial V

ersion

MG4 U

nreg

sion

MG4 U

nregist

ered T

rial V

ersion

MG4 U

nregister

ed Tria

l Vers

ion M

G4 Unre

g

MG4 U

nregist

ered T

rial V

ersion

MG4 U

nregis

tered

Trial V

ersion

MG4 U

nreg

regis

tered

Trial V

ersion

MG4 U

nregis

tered Tria

l Vers

ion M

G4 Unreg

red Tria

l Vers

ion M

G4 Unreg

istere

d Tria

l Vers

ion M

G4 Unre

g

al

Version

MG4 U

nregis

tered Tria

l Vers

ion M

G4 Unreg

ion M

G4 Unre

gister

ed Tria

l Versi

on M

G4 Unre

g

G4 U

nregis

tered Tria

l Versi

on M

G4 Unre

gi

gister

ed Tria

l Versi

on M

G4 Unre

gi

d Trial V

ersion

MG4 U

nregi

V

ersion

MG4 U

nreg

on M

G4 Unre

4 U

nreg

0

10

20

30

40

50

2001 2002

37

2003

4

20042

2005

40

2006

36

2007

4

2008

23

2009

2217

MM

BO

(Oil

)

2010

0 1737 4 2 40 36 4 23 22Oil ResrvesAdded (MMBO)

21 2623 23 23 24 24 25 25 24Oil Production(MMBO)

Oil ProductionOil Resrves Added

185

238

Total

Source: PPIS

MG4 Un

MG4 Unre

giste

MG4 Unre

gister

ed Tr

i

MG4 Unre

gister

ed Tr

ial Vers

MG4 Unre

gister

ed Tr

ial Ve

rsion

M

MG4 Unre

gister

ed Tr

ial V

ersion

MG4 U

nre

MG4 Unre

gister

ed Tr

ial V

ersion

MG4 U

nregis

tere

MG4 Unre

gister

ed Tr

ial V

ersion

MG4 U

nregis

tered

Tria

MG4 Unre

gister

ed Tr

ial Vers

ion M

G4 Unre

gister

ed Tr

ial Vers

i

MG4 Unre

gister

ed Tr

ial Vers

ion M

G4 Unre

gister

ed Tr

ial V

ersion

MG

MG4 Unre

gister

ed Tr

ial Vers

ion M

G4 Unre

gister

ed Tr

ial V

ersion

MG4 U

nreg

MG4 Unre

gister

ed Tr

ial Vers

ion M

G4 Unre

gister

ed Tria

l Vers

ion M

G4 Unre

gister

ed

MG4 Unre

gister

ed Tr

ial Vers

ion M

G4 Unre

gister

ed Tr

ial V

ersion

MG4 U

nregis

tered

Trial

MG4 Unre

gister

ed Tr

ial V

ersion

MG4 U

nregis

tered

Trial

Versi

on M

G4 Unre

gister

ed Tr

ial V

ersion

MG4 Unre

gister

ed Tr

ial V

ersion

MG4 U

nregis

tered

Trial

Version

MG4 U

nregis

tered

Trial

Version

MG4

reg

istere

d Tria

l Vers

ion M

G4 Unre

gister

ed Tr

ial Vers

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ersion

MG4 U

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G4 Unre

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ed Tr

ial V

ersion

MG4 U

nregis

tered

Trial

Versi

on M

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al

Version

MG4 U

nregis

tered

Trial V

ersion

MG4 U

nregis

tered

Trial

Vers

ion M

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gister

ed Tr

ial V

ion M

G4 Unre

gister

ed Tr

ial Vers

ion M

G4 Unre

gister

ed Tr

ial V

ersion

MG4 U

nregis

tered

Trial

Version

G4 U

nregis

tered

Trial

Vers

ion M

G4 Unre

gister

ed Tr

ial V

ersion

MG4 U

nregis

tered

Trial V

ersion

MG4 U

gister

ed Tr

ial Ve

rsion

MG4 U

nregis

tered

Trial

Vers

ion M

G4 Unre

gister

ed Tr

ial Vers

ion M

G4 Unre

gist

d Tria

l Vers

ion M

G4 Unre

gister

ed Tr

ial Vers

ion M

G4 Unre

gister

ed Tr

ial V

ersion

MG4 U

nregis

tered

T

Ve

rsion

MG4 U

nregis

tered

Trial

Version

MG4 U

nregis

tered

Trial

Vers

ion M

G4 Unre

gister

ed Tr

ial Ve

on M

G4 Unre

gister

ed Tr

ial V

ersion

MG4 U

nregis

tered

Trial

Version

MG4 U

nregis

tered

Trial

Vers

ion

4 U

nregis

tered

Trial

Version

MG4 U

nregis

tered

Trial

Vers

ion M

G4 Unre

gister

ed Tr

ial Vers

ion M

G4

istere

d Tria

l Vers

ion M

G4 Unre

gister

ed Tr

ial V

ersion

MG4 U

nregis

tered

Trial

Version

MG4

d Tria

l Vers

ion M

G4 Unre

gister

ed Tr

ial Vers

ion M

G4 Unre

gister

ed Tr

ial V

ersion

MG

Vers

ion M

G4 Unre

gister

ed Tr

ial Vers

ion M

G4 Unre

gister

ed Tr

ial V

ersion

MG

MG4 U

nregis

tered

Trial

Version

MG4 U

nregis

tered

Trial

Vers

ion M

G

Unre

gister

ed Tr

ial V

ersion

MG4 U

nregis

tered

Trial

Version

MG4

stered

Trial

Vers

ion M

G4 Unre

gister

ed Tr

ial Vers

ion M

G

Trial

Vers

ion M

G4 Unre

gister

ed Tr

ial Ve

rsion

MG

ers

ion M

G4 Unre

gister

ed Tr

ial V

ersion

MG

MG4 U

nregis

tered

Trial

Vers

ion M

G4

nre

gister

ed Tr

ial V

ersion

MG4

ered T

rial V

ersion

MG4

Trial

Vers

ion M

G

sion

MG

MG4

0

1,000

2,000

3,000

2001

176

2002

2,033

2003

570

2004

118

2005

1,816

2006

394

2007

264

2008

195

2009

326

2010

663

BC

F(G

as)

176 6632,033 570 118 1,816 394 264 195 326Gas ResrvesAdded (BCF)

875 1,500924 993 1,203 1,345 1,400 1,414 1,454 1,460Gas Production(BCF)

Gas Production

Gas Resrves Added

6,555

12,568

Total

Source: PPIS

…….During last 10 years Pakistan has replaced 52% of its gas reserves…

Size of discoveries decreasing while production is increasing ….

MG4 Un

MG4 Unre

giste

MG4 Unreg

istere

d Tri

MG4 Unre

gistere

d Tria

l Vers

MG4 Unre

gistered

Trial V

ersion

M

MG4 Unre

gister

ed Tria

l Vers

ion M

G4 Unre

MG4 Unreg

istere

d Tria

l Vers

ion M

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gister

MG4 Unre

gister

ed Tria

l Vers

ion M

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istere

d Tria

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ed Tria

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ion M

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istere

d Tria

l Vers

i

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gistered T

rial V

ersion

MG4 U

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ered T

rial V

ersion

MG

MG4 Unre

gistered

Trial V

ersion

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ered T

rial V

ersion

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d Tria

l Vers

ion M

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Trial V

ersion

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tered

MG4 Unre

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ed Tria

l Vers

ion M

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istere

d Tria

l Vers

ion M

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gistered

Trial

MG4 Unre

gistered

Trial V

ersion

MG4 U

nregist

ered T

rial V

ersion

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nregis

tered

Trial V

ersio

G4 Unre

gistered

Trial V

ersion

MG4 U

nregis

tered T

rial V

ersion

MG4 U

nregist

ered T

rial V

ersion

MG4

egis

tered Tria

l Versi

on M

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ed Tria

l Vers

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istere

d Tria

l Vers

ion M

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gi

ed Tria

l Versi

on M

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gister

ed Tria

l Vers

ion M

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istere

d Tria

l Vers

ion M

G4 Unre

gistered

l V

ersion

MG4 U

nregis

tered

Trial V

ersion

MG4 U

nregis

tered Tria

l Vers

ion M

G4 Unreg

istere

d Tria

l V

on M

G4 Unre

gistered

Trial V

ersion

MG4 U

nregist

ered T

rial V

ersion

MG4 U

nregis

tered

Trial V

ersion

4 U

nregis

tered Tria

l Versi

on M

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gistere

d Tria

l Vers

ion M

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tered

Trial V

ersion

MG4 U

gistere

d Tria

l Vers

ion M

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gister

ed Tria

l Versi

on M

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gistered

Trial V

ersion

MG4 U

nregis

d Trial V

ersion

MG4 U

nregis

tered T

rial V

ersion

MG4 U

nregist

ered T

rial V

ersion

MG4 U

nregis

tered T

V

ersion

MG4 U

nregis

tered

Trial V

ersion

MG4 U

nregis

tered Tria

l Vers

ion M

G4 Unreg

istere

d Tria

l Ve

on M

G4 Unre

gistered

Trial V

ersion

MG4 U

nregis

tered T

rial V

ersion

MG4 U

nregist

ered T

rial V

ersion

Unre

gistered

Trial V

ersion

MG4 U

nregist

ered T

rial V

ersion

MG4 U

nregis

tered

Trial V

ersion

MG

istere

d Tria

l Vers

ion M

G4 Unre

gistered

Trial V

ersion

MG4 U

nregis

tered T

rial V

ersion

MG

Trial V

ersion

MG4 U

nregis

tered T

rial V

ersion

MG4 U

nregist

ered T

rial V

ersion

MG

V

ersion

MG4 U

nregist

ered T

rial V

ersion

MG4 U

nregis

tered

Trial V

ersion

MG

n MG4 U

nregist

ered T

rial V

ersion

MG4 U

nregis

tered Tria

l Versi

on M

Unreg

istere

d Tria

l Vers

ion M

G4 Unre

gistered

Trial V

ersion

MG

stered T

rial V

ersion

MG4 U

nregist

ered T

rial V

ersion

MG

Trial V

ersion

MG4 U

nregist

ered T

rial V

ersion

MG

ersion

MG4 U

nregist

ered T

rial V

ersion

MG

MG4 U

nregis

tered T

rial V

ersion

MG

nre

gister

ed Tria

l Versi

on M

G

ered T

rial V

ersion

MG

rial V

ersion

MG

sion

MG

MG

0

1

2

3

4

5

6

7

8

1988

1.0

1989

0.9

1990

6.8

1991

0.8

1992 1993

0.6

1994

0.419950.3

1996 1997

2.9

1998

5.0

19990.4

2000 2001 2002

2.3

2003

0.6

2004 2005

2.1

2006

0.6

2007 20080.3

2009

0.52010

0.8

TC

FE

qu

ival

ent Total Production

Discovered

Source: PPIS

Pakistan’s Oil/Gas Discoveries / Production TrendQ

ADIR

PUR

+K

AND

RA

SAW

AN

/ ZA

MZA

MA

MAN

ZALA

I

MAK

OR

I

BH

IT /

MAR

I DEE

P

MEL

A

Reserves are Sinking with time …….

MG4 Un

MG4 Unreg

iste

MG4 Unre

gistered

Tri

MG4 Unre

gistered

Trial V

ers

MG4 Unreg

istere

d Tria

l Vers

ion M

MG4 Unre

gistered

Trial V

ersion

MG4 U

nre

MG4 Unre

gister

ed Tria

l Versi

on M

G4 Unre

gistere

MG4 Unre

gistered

Trial V

ersion

MG4 U

nregis

tered T

rial

MG4 Unre

gister

ed Tria

l Versi

on M

G4 Unre

gister

ed Tria

l Vers

io

MG4 Unre

gister

ed Tria

l Versi

on M

G4 Unre

gistered T

rial V

ersion

MG4

MG4 Unreg

istere

d Tria

l Vers

ion M

G4 Unre

gister

ed Tria

l Versi

on M

G4 Unre

g

MG4 Unre

gistered T

rial V

ersion

MG4 U

nregist

ered T

rial V

ersion

MG4 U

nregis

tered

MG4 Unre

gistered

Trial V

ersion

MG4 U

nregis

tered T

rial V

ersion

MG4 U

nregist

ered T

rial

MG4 Unre

gister

ed Tria

l Vers

ion M

G4 Unreg

istere

d Tria

l Vers

ion M

G4 Unre

gistered

Trial V

ersion

G4 Unre

gistered

Trial V

ersion

MG4 U

nregis

tered T

rial V

ersion

MG4 U

nregist

ered T

rial V

ersion

MG4

egis

tered

Trial V

ersion

MG4 U

nregis

tered Tria

l Vers

ion M

G4 Unreg

istere

d Tria

l Vers

ion M

G4 Unre

gis

d Tria

l Vers

ion M

G4 Unregis

tered

Trial V

ersion

MG4 U

nregis

tered Tria

l Versi

on M

G4 Unre

gistere

d T

V

ersion

MG4 U

nregist

ered T

rial V

ersion

MG4 U

nregis

tered

Trial V

ersion

MG4 U

nregis

tered Tria

l Ve

on M

G4 Unreg

istere

d Tria

l Vers

ion M

G4 Unre

gistered

Trial V

ersion

MG4 U

nregis

tered T

rial V

ersion

4 U

nregis

tered Tria

l Versi

on M

G4 Unre

gistere

d Tria

l Vers

ion M

G4 Unregis

tered

Trial V

ersion

MG4 U

n

gistere

d Tria

l Vers

ion M

G4 Unregis

tered

Trial V

ersion

MG4 U

nregis

tered Tria

l Versi

on M

G4 Unre

gist

d Tria

l Vers

ion M

G4 Unre

gistered

Trial V

ersion

MG4 U

nregis

tered T

rial V

ersion

MG4 U

nregist

ered T

r

Vers

ion M

G4 Unreg

istere

d Tria

l Vers

ion M

G4 Unre

gistered

Trial V

ersion

MG4 U

nregist

ered T

rial V

er

n M

G4 Unre

gistered

Trial V

ersion

MG4 U

nregist

ered T

rial V

ersion

MG4 U

nregis

tered

Trial V

ersion

Unre

gister

ed Tria

l Vers

ion M

G4 Unreg

istere

d Tria

l Vers

ion M

G4 Unre

gistered

Trial V

ersion

MG4 U

stered

Trial V

ersion

MG4 U

nregis

tered T

rial V

ersion

MG4 U

nregist

ered T

rial V

ersion

MG4 U

Trial V

ersion

MG4 U

nregis

tered T

rial V

ersion

MG4 U

nregist

ered T

rial V

ersion

MG4 U

ersi

on M

G4 Unre

gister

ed Tria

l Vers

ion M

G4 Unreg

istere

d Tria

l Vers

ion M

G4 U

MG4 U

nregis

tered T

rial V

ersion

MG4 U

nregist

ered T

rial V

ersion

MG4 U

nre

gister

ed Tria

l Vers

ion M

G4 Unreg

istere

d Tria

l Vers

ion M

G4 Un

tered

Trial V

ersion

MG4 U

nregis

tered Tria

l Versi

on M

G4 U

Trial V

ersion

MG4 U

nregis

tered Tria

l Vers

ion M

G4 U

sion

MG4 U

nregis

tered Tria

l Vers

ion M

G4 U

MG4 U

nregis

tered Tria

l Versi

on M

G4 U

reg

istere

d Tria

l Vers

ion M

G4 U

red Tria

l Vers

ion M

G4 U

al

Version

MG4 U

ion M

G4 U

G4 U

200

400

600

800

1,000

1,200

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Res

erve

sR

epla

cem

ent

Ra

tio

0

Reserves Replacement ratioin World

Reserves Replacement ratioin Pakistan

Pakistan Vs World

QADIRPUR

MANZALAI MAKORI

SAWAN / ZAMZAMA

BHIT / MARI DEEP

The efforts of oil companies to replenish reserves through traditional exploration have been increasingly unfruitful

Pakistan E&P – Current Situation

Increasing gap between country’s produced and discovered reserves

Decreasing size of new discoveries

Limited availability of the seismic & drilling services

Increasing uncertainties and risks in exploration process

Limited availability of experienced exploration human resource

Most of the low to medium risk areas are already held leaving only high risk/high cost frontier areas

Limited potential for large discoveries in currently accessible onshore areas of Pakistan

Decreasing expected return (reserve addition) against increasing exploration risk

Hopes for the Future

"Future energy resources of the World, particularly gas, will be found in

what we consider today to be unconventional reservoirs. These are not, in

fact, undiscovered resources, since their occurrences are fairly well-known.

However, we do not have adequate geologic data to evaluate the

contribution such reservoirs will make to the World’s energy endowment in

the future.”

(USGS)

Why go for Unconventional Reservoirs......

Unconventional Hydrocarbon Resources

Unconventional resources are o Difficult to develop with available technologyo Expensive to produce

Unconventional hydrocarbon resources includeo Tight Gas (TG) Sand Reservoirs (in situ permeability of less than 0.1 mD and

porosity about 10%)o Shale gaso Coal bed Methaneo Deep gaso Methane hydrateso Tar sands and Oil

shalesBasin-centered Gas

Permeable Ss reservoir

Tight gas play

Pervasive prolific source

rock

Region Coalbed Methane(Tcf)

Shale Gas(Tcf)

Tight Sand Gas(Tcf)

Total(Tcf)

World 9,051 16,112 7,406 32,560

Resource Triangle

Conventional sandstone reservoir

Tight gas sandstone

Tight Gas Reservoir

Gas bearing sandstones and carbonateshaving in-situ permeability to gas of lessthan 1 mD

Many ‘ultra tight’ gas reservoirs may havein-situ permeability down to 0.001 mD

Typically, un-stimulated gas flow rates ina well less than 1 mmscfd

USA: ~ 300 Tcf (Recoverable reserves)Pakistan: ~ 34 Tcf (Estimated recoverable resource)

Shale Gas

Natural gas produced from shale

Shale gas areas often known as resourceplays - not the exploration plays

Shale permeability restricted utilization ofa rich resource in the past

Horizontal drilling and Hydraulic fracturingresulted shale gas boom in recent years

Shale gas expected to account for majorgas supply in USA

USA: ~ 742 Tcf (Recoverable reserves)Pakistan: Prognosticated Reserves 65 Tcf

Unconventional Gas Production (USA)

Projection shows Unconventional Reservoirs will be the dominant resource for Future

Comparison of unconventional gas production in 1996 and 2006

US Total Gas Production

Conventional vs Modular Approach

Tight / Shale Gas Fairways & PPL Blocks

Shale Gas & Tight Gas Fairway Map (Lower Goru) Shale Gas / Tight Gas Fairway Map (Sembar)

Present & Future Scenarios in a Nut Shell…

Several studies suggest that only a small percentage of the huge hydrocarbon volumes that have been generated, reaches the Conventional Reservoirs

Conventional reservoir size and chance of success of finding these is decreasing

2011 Policy for Conventional reservoirs will be announced soon

Significant hydrocarbon volume is present in Unconventional Reservoirs - Tight Gas and Shale Gas– V. Preliminary Assessment: ~ 100 Tcf. Tight Gas Policy 2011 announced while Shale Gas Policy under preparation

Significant volume of Tight Gas is present in Middle Indus Basin

Hydrocarbon Production from Unconventional Reservoirs will eventually take over,

Three pronged approach required: i) Incentivize E&P Sector (Early Cost Recovery, optimum gas price etc; ii) Promote Service Sector; and iii) Gain Buyers’ confidence

Main Drivers : "Technology" and “Gas Price"

Thanks&

Questions?