Recently, Nepal has accorded high priority to encourage foreign investment in the country. With economic liberalization policy of the government and attractive fiscal terms available, Nepal is committed for full cooperation to international companies in facilitating petroleum exploration in Nepal.
Methane gas deposit in Kathmandu Valley is known since long time. Feasibility study has confirmed that this gas can be used for industrial and household purpose and the reserve is sufficient to supply gas to 21,000 families for about 30 years. During preliminary study, 23 geothermal hot springs have been identified nationwide.
The only exploration of theses precious natural resources is done in Kathmandu Valley, where Peat and Lignite is mined and used mainly in firing brick kilns. Only one well, the Shell er al Biratnagar 1, with a total depth of 3,520 m has been drilled in Nepal.
Today, the daily operation cost is in the range of thousands of dollars. But, if considerable amount of oil is found in Nepal, it will be a boon for the Nepalese economy.