ISLAMABAD - US Monday said that exploitation of shale gas would be a commercial decision of oil and gas companies and that will take time.

Actual exploitation of shale gas would be a commercial decision of oil and gas companies and could still be a few years away, said US Embassy spokesman Chris Snipes.

US response has came days after the government of Pakistan ambitiously announced starting pilot project after the USAID in a recent study found 10,159 trillion cubic feet shale gas and 2.3 trillion oil reserves, several times higher than the initial estimates. The US believes the study was just a start and the country has been moved into next stage.

USAID support has created an enabling environment for further work that is required prior to actual exploitation, which includes pilot programs, development of policy and regulatory frameworks, demarcation of blocks, a campaign to promote international private sector investments, and the awarding of blocks via competitive processes, spokesman said.

He said that the study made an assessment of the technology including hydraulic fracturing, infrastructure requirements, and water availability in the area of interest, which was the Lower and Mid Indus Basin of Pakistan. He said actual exploitation of shale gas would be a commercial decision of oil and gas companies and could still be a few years away.

Answering a question about the cots of finished product (oil or gas) obtained from shale resources the US embassy official said that cost would be up to government of Pakistan.

USAID helped Pakistan estimate the amount of shale gas potentially available and helped Pakistan look at various technology options for exploitation of those resources. It would be up to the government of Pakistan how it calculates final prices and whether and how it uses USAID-suggested cost estimates, he said.

According to the U.S. Energy Information Administration, the United States, Canada, China, and Argentina are currently the only four countries in the world that are producing commercial volumes of either natural gas from shale formations (shale gas) or crude oil from tight formations (tight oil). The United States is by far the dominant producer of both shale gas and tight oil.

Notable shale resource exploration efforts are underway in several countries, including Algeria, Australia, Colombia, Mexico, and Russia. However, commercial shale development of the type demonstrated in the United States requires the ability to rapidly drill and complete a large number of wells in a single productive geologic formation. The logistics and infrastructure necessary to support this level of activity, including the drilling and completion processes, the manufacturing of drilling equipment, and the distribution of the final product to market are not yet evident in countries other than the United States, Canada, China, and to some extent, Argentina, claims USEIA.