Sets two-pronged strategy to meet oil production target of 200,000 barrels per day
Interview with Mr Raziuddin Razi – CEO, Khyber Pakhtunkhwa Oil & Gas Company Limited
Raziuddin Razi, who is the Chief Executive Officer of Khyber Pakhtunkhwa Oil & Gas Company Limited (KPOGCL) for one and half years having a vast experience and worked in both international and domestic energy sectors. Raziuddin, who did his MSC and MBA from Michigan and New York Universities, served in Pakistan Planning Commission as Chief Energy. Raziuddin also served in Saudi Royal Commission as Technical Advisor. He was also the Chief Executive Officer (CEO) of Attock Refinery from 1997 to 2005. Raziuddin was also the Managing Director of OGDCL from 2005 to 2006. He has been member of the Board of Directors of various oil companies and refineries besides highly prestigious education institutions like LUMS.
While expressing his view on the prevailing energy situation in the country as well as in the province of Khyber Pakhtunkhwa (KPK) he is confident that it is a matter of time only as the province sufficient energy reserves can cater to the growing need of the country while the province of KPK is in a unique position to serve the energy sector.
PAGE: We note from your website that you are aiming for production of over 200,000 barrels per day by 2025. This is almost doubling current production levels and an ambitious target — how will you achieve this target?
RAZIUDDIN RAZI: KPOGCL has a two-pronged strategy to achieve this ambitious goal. The first part is getting rid of all the hurdles on the way by providing an enabling environment for investors to come and invest in the oil & gas sector of Khyber Pakhtunkhwa thus going from red tape to red carpet. KPOGCL is entrusted with the responsibility to allure more E&P companies to do so by ensuring them with the requisite security and the first hand sharing of technological data thus literally acting as a fast track implementation of E&P. KPOGCL, while being actually KPK government sponsored/patronized, thus can very conveniently act as an interface between the E&P companies and all the other government related agencies thereby actually performing the role of ‘One Window of Operations’. Since, investment is the main catalyst in the world of oil & gas, hence providing one-window facility is the key to attracting investors to the province thereby boosting production of oil and gas.
The second part of the strategy is about aggressive exploration programs in all parts of the province where preliminary studies have shown to have a lot of potential of oil & gas reserves. Since, KPK is already producing more than 50% of the total share of Pakistan’s oil production, our target of 200,000 barrels per day can be easily achieved with this two-pronged strategy.
By the Grace of Almighty Allah, oil & gas have been discovered in the first exploratory well (Dhok Hussain -1) of Baratai Block in a record time of 6 months in the history of KPK where KPOGCL is a joint venture partner with OGDCL. The well has tested around 700 BPD of oil and 30 MMCFD of gas. This success shall bring over a billion of rupees of royalty and other revenue to the Government of KPK per year. Similarly 20-21 wells have been planned in coming 2 years in several blocks lying in Khyber Pakhtunkhwa. Six refineries and three power plants are under planning for further enhancing our quality of work and reaching our goals.
We also aim to produce 2,000 MMCFD of gas and 3,000 tons per day of LPG through operatorship, joint venture partnerships, facilitation of international & national investors and ‘one window’ facilitation for security and exploration & production services.
PAGE: How have you changed exploration and drilling techniques over the last few years? How much more technology is used now for exploration?
RAZIUDDIN RAZI: The exploration and production activities are being enhanced on fast track basis, projects and upgradation has been initiated to have the state-of-the-art labs with specialized equipment, seismic planning, acquisition, processing & interpretation’s software, modern analyzing techniques & tools for surface geological & well cuttings, core cuttings, drilling simulators, mud testing & analyzing methods.
Recognizing the need for swift low cost local testing of Exploration and Production (E&P), KPOGCL is working to establish state-of-the-art Hydrocarbon Technical Laboratory. Given the scope of hydrocarbon reserves in the province of Khyber Pakhtunkhwa, we felt the dire need of availability of human resource capital. KPOGCL has undertaken an initiative in terms of constituting a state-of-the-art Petroleum Technology Institute at Karak to equip the students with necessary technical skills to be utilized in mega projects in Khyber Pakhtunkhwa.
The continuous and ever-increasing demand for fossil fuels and in particular oil and gas has pushed drilling and exploration industry to drill in ultra-deep waters with the wells drilled to depths in excess of more than 7500m. These wells are very expensive to drill and complete with costs up to about $100 million.
In Pakistan currently the Operators/E&P companies looking for new ways of unconventional techniques. Pakistan having the 7th largest unconventional deep reserves as per the EIA studies by USA. Deep drilling is the new prospect in the oil & gas sector over the worldwide and particularly in Pakistan. Deep drilling will have less environmental consequences. Another advantage from deep drilling is it’s a source for the geothermal energy, which is carbon free green energy and future prospectors are bright.
The new methods of exploration like remote sensing, Ariel Reconnaissance (SFD Survey), Magnetic, Gravity & Resistivity Surveys are being used. New technology for horizontal drilling i.e. Hydraulic Fracking is under consideration once the feasibility for the unconventional reservoirs is complete. KPOGCL is the first in KPK and third in Pakistan to have searched and conducted studies on shale oil and gas and has successfully completed it and identified two ‘sweet’ spots for drilling in Kohat Basin. In Phase II, KPOGCL will conduct Sedimentary Basin studies in whole of Khyber Pakhtunkhwa.
PAGE: Can Pakistan ever become fully self-reliant for its energy needs?
RAZIUDDIN RAZI: Pakistan in fact, is already on the path to becoming fully self-reliant for its energy needs. The country is blessed with many natural resources. Our KPK has proven oil reserves of 1.1 billion barrels and natural gas reserves of 16 trillion cubic feet. KPOGCL has discovered 27 seepages and identified 7 blocks in just three years. Our Baratai block was recently announced as a successful joint venture and a lot is expected from it as it will also add to the future of our country. The exploration process that took two years in the past is now happening in six months due to the intervention of KPOGCL. License for award of Petroleum blocks (Exploration and Production) is awarded by Ministry of Energy (DGPC) — a Federal entity. The more licenses are granted by DGPC, the more prospects for local production of oil and gas. All this, if managed properly, can greatly help alleviate the country’s energy needs and make it fully self-reliant in this field.
PAGE: With Pakistan possibly facing an unemployment problem in the years to come – what are you doing to educate people in the exploration sector within the O&G sector?
RAZIUDDIN RAZI: Unemployment has been a real challenge for successive governments in Pakistan and a big reason of this is due to the fact that our graduates do not receive industry-specific practical training. That is the reason most of the educated youth in Pakistan struggle to get a job. We at KPOGCL, being cognizant of this core problem, have initiated various programs where we educate people with various skills in the oil & gas sector. One of such programs is the internship program where new graduates get practical experience while working with KPOGCL. In addition, KPOGCL in partnership with UET- Peshawar has introduced MS in Energy Management and Sustainability degree program to equip high-level managerial skills in the public and private sector professionals. This HEC-approved Program is designed to prepare future energy managers with high skills to manage mega-projects successfully. This program is specially designed to prepare and equip future energy managers with skills to conceptualize, plan, develop, budget, finance, leverage, bid, project management, construct, commission, operate and manage mega-projects in energy (oil and gas) and power sector. The Energy Managers shall acquire the capability to break new grounds and produce new knowledge by undertaking research work in the field. Lectures are being imparted by renowned industry experts and academic professors. I, myself, deliver lectures on Energy Management and Sustainability at UET Peshawar as a visiting faculty to benefit students with innovative energy technologies.
PAGE: How sensitive is exploration to oil price volatility? Have you witnessed a spike in exploration activity with oil prices moving higher?
RAZIUDDIN RAZI: Oil price volatility plays an important role in the strategic investment decisions of the oil exploration and production companies. It creates uncertainties regarding a firm’s expected profitability, valuations and investment decisions. That is why exploration and production gets highly effected with oil price volatility. The exploration and production activity experiences a noticeable spike when the oil prices are on the rise and vice-versa. This happens due to the fact that investors expect a higher return on investment when oil prices move higher and vice-versa.
We at KPOGCL are striving to bring the exploration and production of oil and gas upfront and in the spotlight by making Pakistan a self-reliant country and add to its economy with our day and night efforts. The lowering of price is a positive point for us as all the equipment’s and machines we use for exploration are on rates that make it easy for us to afford them and also work efficiently.