Shale Gas Potentiality in Bangladesh - Final Report

1. Presentation of Final Report –Preliminary Study on Shale Gas Potentiality in Bangladesh Presented by Torsten Gorka DMT GmbH & Co. KG, Essen, Germany 10.06.2015 Dhaka, Bangladesh

2. Contents – Final Report Part A: Introduction • Background and Context; Purpose and Scope of the Evaluation Part B: Scope of Work • Methodology; Data Review; Discussions and Interviews; Limitations Part C: Geological Setting • Stratigraphy, Lithology etc. Part D: Data Base • Literature descriptions, Borehole data, Geophysical data Part E: Evaluation of Shale Gas Plays • Evaluation Parameters; Assessment and GIIP, comparison with plays outside Bangladesh Part F: TOR for future work, Conclusions and Recommendations • Results of the study, recommendations, outlook Part G: References and Appendices • Formation Tops, Geophysical logs, Well Summaries

3. Part A: Background and Purpose: Shale Gas - Bengal Basin • Several conventional gas fields at eastern border • Growing population • Depleating gas production • Energy demand exceeds supply • Objective of the Study:Has shale gas a potential?

4. Part A: Background and Purpose: Shale Gas - Bengal Basin Principle of shale gas extraction Source: http://thewatchers.adorraeli.com/2012/04/18/uk-will-allow-shale-gas-fracking-despite-earthquake-connections/

5. Part A: Schedule Work and Reporting 17.09.13

6. Part A: Schedule Work and Reporting • Signing contract: 09.06.2013 • Inception Report: 30.06.2013 • Draft Final Report: eight weeks from the commencement of the services (now 17.09.2013) • Final Report: two weeks after receiving of HCU’s comments, (now 14.11.2013) • End of Project: 08.10.2013 • Final Presentation: 10.12.2013 (Dhaka)

7. Part B: Scope of Work – Inventory and Review of Data Objectives: • Taking stock of information for available description of shale plays • Review of existing well logs of selected area • Establishing shale gas plays and their lateral extents • Establishing thickness and depth of the shale plays • Review existing geochemical data of the shale formations (as available) • Identify areas where further investigation is necessary • TOR for future phases of work, on the basis of Preliminary Study • Methodology: • Desktop study based on existing data without any field and laboratory work

8. Part B: Scope of Work – Inventory and Review of Data Regional and General Geological Data • Existing reports and publications: stratigraphy, facies developments, regional thickness variations, structural framework, basin development, etc. • Recent Study (see TOR) Well Data • General Review: number and location; target layers, thickness and parameters measured and analysed • Review of existing well logs of selected areas (see TOR) Geophysical Data • Seismic data: general review, location, 2D/3D • Down-hole geophysical data with reference to target shale layers

9. Part C: Geological Setting Three main geological provinces Stable Shelf Sylhet and Hatia Trough Chittagong-Tripura Fold Belt BOGMC (1986) & Alam et al. 2003

10. Part C: Geological Setting Stratigraphic sections for Eastern and Western Bangladesh showing tectonic history, phases and megasequences, and petroleum system elements (Curiale et al. 2002)

11. Part C: Geological Setting Stratigraphic succession of the Stable Shelf Province Green boxes indicate shale prone intervals. After Alam et al. 2003.

12. Part C: Geological Setting Stratigraphic Succession of the Sylhet and Hatia Trough Green boxes indicate shale prone intervals. After Alam et al. 2003.

13. Part C: Geological Setting Stratigraphic Succession of the Chittagong-Tripura Fold Belt Green boxes indicate shale prone intervals. After Alam et al. 2003.

14. Part C: Geological Setting – Gondwana Group Simplified lithology of the Paharpur Formation in borehole EDH-10 total 95 m shale Simplified lithology of the Kuchma Formation in borehole Kuchma-IX total 135 m shale After Islam & Eickhoff 2001

15. Part C: Geological Setting – Tura/Cherra Sandstone Bogra -1 74.5 m shale 93.5 m sandstone shale/sandstone ratio 44% Thickest shale layer 32 m Tura/Cherra Sandstone

16. Part C: Geological Setting – Kopili Shale Bogra -1 94 m shale 79 m sandstone shale/sandstone ratio 54% Thickest shale layer 36 m Kopili Shale

17. Part C: Geological Setting – Jenum Shale Jenum Shale, cored interval in Atgram-1X 261 m strongly compacted, dark siltstone and shales with interbedded quartzitic sand layers; at top conglomerates; thin conglomeratic intercalations.

18. Part C: Geological Setting – Bhuban Formation Depth map at Top Bhuban Formation Data source: Uddin & Lundberg 2004 Thickness map of Bhuban Formation Data source: Uddin & Lundberg 2004

19. Part C: Geological Setting – Boka Bil Formation Depth map at Top Boka Bil Formation Data source: Uddin & Lundberg 2004 Thickness map of Boka Bil Formation Data source: Uddin & Lundberg 2004

20. Part D: Data Base – Borehole Data

21. Part D: Data Base – Borehole Data Formation Tops from Completion Reports

22. Part D: Data Base – Borehole Data Maturity (Ro) from Geochemical Reports

23. Part D: Data Base – Borehole Data Total Organic Content (TOC) from Geochemical Reports

24. Part E: Evaluation Parameters – Establishing the shale plays Parameters • Lateral extent and thickness – volume • TOC and types of kerogen and HC contained • Burial depth and thermal maturity – vitrinite reflectance • Seal • Structural complexity, fracture systems, stress regime • Composition of shale – content of quartz and clay, type of clays control on mechanical properties • Water content and composition • Gas pressure • Porosity and Permeability

25. Part E: Evaluation Parameters – Establishing the shale plays Stratigraphic units with principle shale gas potential are: • Gondwana Group (Kuchma and Paharpur Formations) • Jaintia Group (Tura Sandstone and Kopili Shale) • Barail Group (Jenum Shale) • Surma Group (Bhuban and Boka Bil Formations)

26. Part E: Evaluation of Shale PlaysGondwana Group 5 – 7.5

27. Part E: Evaluation of Shale PlaysTura Sandstone 5 – 7.5

28. Part E: Evaluation of Shale PlaysKopili Shale 5 – 7.5

29. Part E: Evaluation of Shale PlaysJenum Shale *no decent log coverage available 5 – 7.5

30. Part E: Evaluation of Shale PlaysBhuban Formation 5 – 7.5

31. Part E: Evaluation of Shale PlaysBoka Bil Formation 5 – 7.5

32. Part E: Evaluation of Shale Plays Findings: • Low maturity values exclude all Formations of Tertiary Age for being suitable for economic shale gas production in the Bengal Basin • In none of the geochemical samples down to 4877 m (Jenum Shale in Atgram-1X) favorable maturity values greater than 0.8% have been reached • Geochemical evaluations from several boreholes place the minimum depth for the beginning of gas generation (Ro>0.6%) at depths between 3900 and 4975 m, averaging to some 4000 m • Compiled maturity vs. depth trends indicate that the 0.8% threshold will be reached at depth below 5000 m. These findings are in line with BOGMC 1986. 5 – 7.5

33. Part E: Evaluation of Shale Plays Tertiary Shales - Depth of gas window in meter below surface Over most areas Tertiary shales are immature for gas generation or buried too deep for economic production 5 – 7.5

34. Part E: Evaluation of Shale Plays Maturity vs. depth trends from compiled data

35. Part E: Evaluation of Shale Plays • The Gondwana Group in the stable shelf region has reached favourable maturity but • Gamma Ray Log from Kuchma-X1 clearly indicates that the shale content stems from intercalated intervals which do not exceed 4 m in thickness • Further restriction may arise from the TOC distribution. • Though one maximum TOC value of 9.88% has been recorded, the remaining four samples are in a range of just 1.2 to 1.5%

36. Part E: Evaluation of Shale Plays Permo-Carboniferous Gondwana Group in favourite depth setting 5 – 7.5 Maturity of Gondwana Group (Islam & Eickhoff 2001)

37. Part E: Evaluation of Shale PlaysComparison with Plays outside Bangladesh Damodar Valley Basin (East India) • Prospective Area 2800 km² (1080 mi²) • Early Permian “Barren Measure Shale” • TOC 3%-6% (avg. 3.5%) • 75 m marine shale 5 – 7.5

38. Part F: TOR, Conclusions and Recommendations Results: • In the Tertiary sediments shale intervals > 20 m in thickness may occur in places in the Kopili, Jenum and Tura Sandstone Formation, but they reach maturities at depths > 5000 m, thus being not economic for extraction. • The basins of the Gondwana Group have favorable maturity, but contain only thin shale sequences, and TOC is also a critical factor. • No valid shale gas plays exist in Bangladesh. • However, very limited potential may still exist because • Data review has been restricted to historic data • Recent results of activities, including exploration data from international oil companies, were not available • The potential of large areas are based on interpolation between widely spaced wells and remain untested by drilling

39. Part F: TOR, Conclusions and Recommendations • During exploration for conventional HC deposits detailed studies of source rocks are often not done because sandstone, as a reservoir, was the target. • Future improved exploitation technology and economic parameters may make it eventually possible to exploit thin shale units. • It is recommended to focus firstly on other targets as namely Coalbed Methane (CBM) from the Gondwana Group. • In this context the shale sequences in the Gondwana Group should be studied in detail together with the gas content in order to validate the assessment of this report and achieve a more detailed estimate. • The evaluation of the described factors requires comprehensive data collection and thorough analysis to assess the potential of unconventional reservoirs. • 2D/3D seismics, microseismics, drilling, well logging, hydrogeology

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