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The Department of Mines and Geology (DoMG) has initiated internal preparations for a second-phase agreement aimed at advancing petroleum extraction in Dailekh following the completion of initial exploration works.

The DoMG is preparing for an additional agreement with the China Geological Survey to facilitate the commercial extraction of petroleum resources discovered during ongoing exploration activities.

The Petroleum Exploration Project, being implemented with technical assistance from the Chinese government to support domestic petroleum production, has completed the first phase of drilling and exploration at Jaljale in Bhairabi Rural Municipality-1 of Dailekh district.

Following the completion of drilling and exploration works, the DoMG has coordinated with the government to secure the necessary support for the proposed agreement, which is expected to pave the way for commercial production.

According to Dharma Raj Khadka, acting chief of the Petroleum Exploration Project, the DoMG, in collaboration with a Chinese technical team, recently completed seismic, geological and magnetotelluric surveys, along with geochemical sampling in the project area.

Sample analyses conducted to assess hydrocarbon reserves and production potential have indicated promising prospects for both petroleum and natural gas, project officials said.

The successful implementation of the project could significantly reduce the country's expenditure on petroleum and natural gas imports, while contributing to import substitution and broader economic development.