KATHMANDU: The Department of Mines and Geology has begun preparations for a second-phase agreement aimed at advancing petroleum production in Nepal.
The department is making internal preparations for an additional agreement with the China Geological Survey to move toward commercial extraction of petroleum resources.
According to the Petroleum Exploration Project, which is being implemented with technical assistance from the Chinese government, the first phase of drilling and exploration activities has been completed at Jaljale in Bhairabi Rural Municipality-1 of Dailekh.
Having completed drilling and exploration work, the department is now coordinating with the government to secure the necessary support for a new agreement that would facilitate the start of commercial production.
Acting project chief Dharmaraj Khadka said that, in collaboration with a Chinese technical team, the project has recently completed seismic surveys, geological surveys, magnetotelluric surveys, and geochemical sampling.
Sample testing conducted to assess petroleum reserves and production potential has also indicated the presence of petroleum and natural gas resources in the area, according to project officials.
Authorities believe that successful implementation of the project could significantly reduce Nepal’s petroleum and natural gas import bill, contribute to import substitution, and support the country’s broader economic development goals.
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