Wednesday, October 25, 2006

Oil and Gas Resources
Can We Expect in Nepal ?

Bharat M. Jnawali

Project Chief Petroleum Exploration Promotion Project, Department of Mines and Geology , Nepal

Petroleum exploration

Petroleum is a form of mineral oil occurring in nature as a liquid compound mainly of carbon and hydrogen with varying small amounts o oxygen, Sulphur and nitrogen. Petroleum is generally found in association with natural gas, saltwater and sometimes solid hydrogen minerals. Petroleum that comes out of the well or mine is called crude oil which after refining by distillation process in the refinery plant forms fuel oil such as petrol, diesel and kerosene.

The conventional and widely used method for petroleum exploration in Nepal as in. other countries is integrated geophysical and geochemical approaches. The potential exploration area for oil and gas in Nepal is the southern part of the country comprised of the Terai and the Siwalik foothills. With a view to promote exploration, the area is divided into 10 Exploration Blocks. The block numbers from west to east are I (Dhangadi), 2 (Karnali), 3 (Nepalgunj), 4 (Lumbini), 5 (Chitwan), 6 (Birganj), 7 (Malangawa), 8 (Janakpur), 9 (Rajbiraj) and 10 (Biratnagar). Each block has an area of approximately 5000 sq. km.

The acquisition of exploration geophysical data in Nepal effectively began in 1979 with a regional aeromagnetic survey of the Terai and Siwalik area. The survey proved to be useful in assessing the basement grain of the Terai for planning initial seismic survey. Later regional gravity survey was carried out over entire Terai. In 1984, photological study was done producing geological maps of the area. The Terai and Chure area has been covered by regional scale seismic survey, In 1985, Dutch Shell Oil Company and US Triton Energy acquired exploration right over Block 10 (Biratnagar) and did further geological and seismic investigations. In 1989, the Company drilled one exploration well down to a depth of 3520m at Radhanagar in Bahundangi VDC to test the hydrocarbon potential of a seismically defined structure.

Geological Indications of hydrocarbon

It is an established fact that about 50 million years ago, there existed Tethys Sea where Nepal along with the whole Himalaya lies today. As a result of continuous drifting of Indian Plate and its collision with the Tibetan Plate, Tethys Sea disappeared and the Himalaya emerged out of the sediments largely deposit in the sea. Several large basins were simultaneously developed on the northern margin of the Indian Continent.

Among such basins, Potwar Basin in Pakistan and Assarn Basin-in India have proven oil and gas reserves and are producing oil and gas since long time. Nepal ’s potential area lies in the Ganga Basin , which stretches from India . Drilling on Indian side has revealed significant content of hydrocarbon in some of the wells.

Investigations carried so far in Nepal have indicated the three important natural conditions (source, reservoir and seal rock) required for formation of oil and gas resource. Organic-rich possible source rocks are found widespread stratigraphically and geographically above the Main Boundary Thrust (MBT) in the Gondawana Group and Surkhet Group. Potential reservoir rocks and seal rocks are expected in the Siwalik and Surkhet Groups respectively. Seismic data have revealed favorable geologic structures for storing and trapping of possible oil and gas. The geochemical analysis of the visible oil seeps from Dailekh area indicates that these showings have geological origin from a mature source rock. Nepalese exactly similar geological setting and history to that of Potwar Basin of Pakistan and Assam Basin of India lead us to believe that there is a fairly strong possibility of finding petroleum resources in Nepal .

International oil companies and Governmental policy

Presently two international oil companies have acquired acreages for conducting exploration. An UK independent oil company Cairn Energy entered into agreements with HMG in August 2004 for exploration in Block Nos. 1 (Dhangadi), 2 (Karnali), 4 (Lumbini), 6 (Birganj) and 7 (Malangawa). The company is currently operating in India and Bangladesh in both exploration and production very successfully. Cairn has already purchased data packages of about 200,000 US dollar from the Petroleum Exploration Promotion Project (PEPP) under Department of Mines and Geology and is currently analyzing and reinterpreting the seismic data for planning and designing further seismic program in the acquired acreages. With rapid advancement of the technology especially in computer software and the state of art in geophysical data acquisition and interpretation, more precious and accurate information can be obtained of the subsurface of the earth. Keeping in view of these techniques, the company has submitted its programs and budget to PEPP for the initial exploration period of four years and has commenced the work.

Similarly, Texana Resources Company of Houston , USA has started exploration right of Blocks 3 (Nepalganj) and 5 (Chitwan). The company was planning to conduct seismic surveys, but it has suspended all activities using force majeure clause of the Petroleum Agreement due to security reason. To explore petroleum products - HMG has a policy of involving international oil companies in petroleum operations in accordance with Nepal Petroleum Act 2040 (1983) and Regulation 2041 (1985). Petroleum rules have established the procedure for bidding, evaluation, negotiation and granting of Petroleum Agreement. A model production sharing agreement contains basically all the items to be covered in the petroleum operation.

Geological condition and Formation of Petroleum

Petroleum is formed by the thermal transformation of organic matter accumulated in sedimentary rocks; the organic matter was derived from the remains of minute and primitive forms of life that existed millions of years ago. Most oil appears to have formed under marine conditions, but some may have been formed under estuarine or deltaic conditions. Oil is mainly generated from organic matter is derived from micro-organisms living in aquatic environments, whereas organic matter that comes from terrestrial plants mainly 2000 generates gas.

The transformation of organic matter to petroleum takes place through a complex process initiated by bacterial attack under favorable conditions producing kerosene followed by maturation process under suitable pressure and temperature ultimately leading to the formation of petroleum. The sediment load or the thickness of sediments overlying the organic rich zones acts as a source of pressure and temperature for maturation of the sediments. It is also recognized that petroleum is formed in some source types the source rocks and later migrates and accumulates in other rock types having entirely different properties the reservoir rocks.

For formation of oil and gas resources, four natural conditions are essential: presence of source rock, reservoir rock, seal or cap rock and thermal maturation environment. For the sedimentary basins to host petroleum, it must contain an effective mature source rock. Petroleum accumulates in a rock that has porosities high enough to store large amount of petroleum and permeability sufficiently high for petroleum to be able to flow towards the production well. Seal rock made up of impermeable beds is required to trap or preserve the oil or gas within the reservoir. We have all these conditions, but if there is no sufficient thermal maturity of the buried sediments, hydrocarbon contained in the source rock cannot be released. Therefore the natural condition of thermal maturity under appropriate depth within oil generation window is also a prerequisite for formation of oil. In absence of any one of these natural conditions, we cannot expect formation of petroleum.

Conclusion

Various geo-scientific studies carried out so far have demonstrated that suitable conditions such as the presence of source rocks, reservoir rocks and seal rocks required for generation and storage of oil and gas reserves exists in the southern part of the country. Oil and gas seeps of Dailekh are the visible indications of occurring petroleum sources somewhere at depth. Further support to this has been evidenced by the occurrences of petroleum fields in the analogous geological setting in Potwar to the west and Assam basins to the east. Furthermore, some of the wells drilled by Oil and Natural Gas Corporation (ONGC) in the Ganga Basin across the border on the India side have shown presence of hydrocarbon in the correlatable lithologic units. In Nepal , the fact is that detail exploration has not yet been done except one exploratory well in Biratnagar Block to assess the potentiality of the geological indications. It is good that HMG has recently entered into agreement with a prominent oil company Cairn Energy for exploration in the five blocks. The company is both technically and financially competent and has an excellent track record of success in India and Bangladesh . If the planned field activities especially seismic surveys to be conducted by using dynamites are implemented as per the proposed programs without any hindrance, Nepal ’s position in terms of petroleum resource would emerge clearer.

Text courtesy: Science and feature Vol: 1 N: 8 April/May 2005-ed.