Recent news from Dailekh states that the exploration of crude oil in this hill district has reached its final phase. The Dailekh drilling, concentrated on a 45-ropani land area in Bhairabi Rural Municipality-1, Jaljale, began in May and is progressing at a rate of 15 to 20 meters per day. According to the Department of Mines and Geology, 3,800 meters of drilling work has been completed. A joint team of 80 field workers, including Nepali and Chinese experts, plans to drill an additional 200 meters, aiming to reach the 4,000-meter mark by mid-January. Oil reserves around the world are typically located at depths ranging from 1,500 to 3,500 meters. Nepal started flirting with the idea of exploration in the late 1980's but the first exploration project at Bahuni of Morang district has made no headway. The exploration in Dailekh began in 2016. The initial plan was to complete the first phase of exploration in six months and the entire exploration in two years. However, the COVID-19 outbreak in China in December 2019 affected the petroleum exploration work in the subsequent years.
The technical teams have been collecting samples and sending them for testing to the Department of Mines and Geology and China. The department expects the final report on the collected samples to be ready in the next four months. Geologists and surveyors are optimistic about prospects of petroleum and natural gas reserves in and around the exploration areas. The Chinese technical team completed the first phase of seismic, geological, magnetotellurics, and geochemical sampling surveys. Nepali technicians have reported detecting smells of petroleum products in recent drilling around Shirathan, Nabhisthan, and Padukastan. A detailed report following this final drilling will reveal the actual situation. The drilling is crucial in determining whether petroleum products exist in this area and, if found so, whether extracting them commercially would be feasible. The ongoing exploration will confirm the presence of oil or gas. The final report after testing the samples will provide evidence, or at least suggest a thing or two about the quantity and feasibility of extraction.
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Once the facts are on the table, Nepal should seriously study the prospects of whether to go ahead with its plans to extract and process crude oil. Even if crude oil and gas reserves are found, it may not always be very feasible. The United Kingdom and Canada, for example, shelved their extraction plans due to the high extraction costs and fluctuating oil prices. Nepal has immense hydropower potential. It may be advisable for Nepal to concentrate exclusively on harnessing its water resources to meet the country's energy needs. Additionally, the world is actively migrating toward clean energy, reducing the carbon footprint largely caused by fossil fuels. We also need to factor in the 12 petroleum-exporting countries that call the shots when it comes to fossil fuel demand, supply and the price structures. The economic and political relations of the Organization of Petroleum Exporting Countries (OPEC) are rather dynamic, and new oil producers seem to find it hard to play to the tunes of the OPEC. We cannot also ignore the fact that Qatar, Indonesia, Ecuador and Angola have ultimately had to drop out of OPEC. The exploration of crude oil in Dailekh is a significant development, yet Nepal ought to carefully weigh the benefits and challenges of pursuing oil extraction against its commitment to clean energy and sustainable development.
