Mar 2, 2010

Treasure hunt

Properly trained human resource can make a difference in oil and gas exploration

By Latif Ahmad Rana and Alauddin Masood

Pakistan has the potential to increase indigenous production of oil and gas reserves. The country’s energy resources remain inadequately tapped due to absence of proper planning and resources necessary to undertake this vital task. Pakistan is presently producing 67,000 barrels of oil and 3,950 million cubic feet (MMSCFD) of gas per day against the country’s daily requirement of 400,000 to 450,000 barrels of oil and 5,900 MMSCFD of gas. In other words, the country is facing a daily shortfall of 330,000 to 380,000 barrels of oil and 1,950 MMSCFD of gas.

The shortfall of gas is projected to increase to four billion cubic feet per day by 2025 if new gas fields are not discovered and added to the national network. According to conservative estimates, the country is suffering a loss of Rs450 billion annually due to the continuing energy crunch. These losses are projected to grow substantially if new discoveries are not made to secure Pakistan’s future energy needs.

According to one estimate, the Oil and Gas Regulatory Company Limited (OGDCL) has the infrastructure and capability for substantially increasing exploration activities and also has the potential to make Pakistan self-sufficient in oil and gas within 10-15 years if it adequately plans acquisition/training of additional technical manpower and equipment over a period of 5-8 years.

For realising this goal, it is, however, imperative for OGDCL to acquire the services of fully qualified and adequately experienced and motivated Exploration and Production (E&P) management team, and allowing them the independence to make technical and financial decisions solely on merit, without unnecessary interference from official quarters.

The exploration and production of oil/gas is a very complex business, involving all sorts of technologies from simple workshop work to complex space technology, which brings to the fore the capability and experience of the E&P management to fully comprehend the affecting parameters and take appropriate decisions after listening to various specialists. However, OGDCL is presently staffed by a small number of qualified and experienced personnel.

With the available resources, OGDCL cannot undertake exploration activities such as drilling wells during this financial year. Any shortcuts in the proper evaluation of prospects could result in more dry/unproductive wells causing colossal financial losses and marring OGDCL’s repute.

The exploration process of any E&P company comprises of various stages, involving evaluation of existing data of available areas, establishing additional data requirements for each area, planning and carrying out surveys for acquiring data, and rationalising/processing the acquired data, etc.

The completion of this process may take a minimum of 3-5 years, from taking over an area and drilling wells there, depending upon the terrain and accessibility of the area. As most of the easily identifiable oil/gas structures/traps have already been exploited, now a lot more work is required in the form of evaluating the existing data to come up with identifiable prospective locations for the drilling exploratory wells.

If exploration activity is to be increased, there would be need for more prospective petroleum concession areas, along with qualified, well-trained and experienced E&P professionals not only for data collection and evaluation but also for drilling productive wells. Following acquisition of additional concession areas, OGDCL can proceed by hiring consultants to fill the gap till it can train the additionally hired professional staff for effective handling of their responsibilities.

Generally, all E&P companies prepare their plans on short, medium, and long term basis for 5, 10, 15, and 20 years period and accordingly plan the availability of manpower and financial resources to meet the set targets. Therefore, for planning any level of exploration activity, OGDCL will have to follow the well laid-down planning processes. It will be required to:

1. Acquire/hire staff and get it adequately trained by enlisting the services of competent consultants as and when required;

2. Prepare plans and acquire areas for a continuous, planned, and sustained activity;

3. Prepare plans for data collection/acquisition and take practical measures, including increasing its stock of seismic equipment as well as manpower, or, alternately hire private services for seismic activities aimed at acquiring and processing 2D/3D seismic data for evaluating the prospects for success of each and every area;

4. Prepare plans and take practical steps to process 2D/ 3D seismic data and thus facilitate the job of professionals to interpret it and come up with oil/gas prospective well-drilling locations; and finally,

5. When they get some leads and are able to identify prospective well locations, with planned drilling depths, the supporting departments will be required to put resources together to procure well consumables and services required for practically drilling and possible completion of wells.

For minimising project costs, it is important not to use over-designed and oversized service equipment/rigs. As E&P business is capital intensive, it is essential that the top technical team of each department is professionally competent, has best managerial and technical skills and the ability to efficiently manage and coordinate with sister departments so that the technical as well as administrative decisions are made well in time for best possible results.

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