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Cover Story

Union Texas to discover oil & gas in Karachi

Additional 5,000 barrels per day to its existing production estimated

Oct 11 - 17, 1999

Union Texas Pakistan (UTP), the largest oil producing company in the private sector, is in a comfortable position to retain its leading position in future with the on-going development process of 10 new wells. The job is likely to be completed by December 1999.

New wells, being developed at various locations, are expected to add another 5000 barrels per day to the existing production capacity o the country some time next year.

Currently, UTP is producing around 23,500 barrels of crude per day from Badin oilfield. Since the supply from the old source of Badin oilfield is depleting gradually, the production of 5000 barrels from the forthcoming wells would, however, reinforce UTP production capacity and also to retain its leading position as the largest oil producer in Pakistan.

Infact, UTP is aggressively engaged in exploring opportunities in oil and gas sectors in Pakistan. In this connection, UTP has conducted a seismic survey in the urban areas of 'Karachi Concession Block' early this year. Data of this survey has already been collected which is in the process of interpretation. The interpretation results would help to determine the prospects about potential of gas and oil in 'Karachi Concession Block'.

Union Texas Pakistan, Inc. (a subsidiary of Atlantic Richfield Corporation, USA) is the largest private sector oil and gas exploration and production company in Pakistan. It is the operator of the Badin Joint Venture in Sindh, whose partners include Occidental Petroleum Pakistan, Inc, and the Oil and Gas Development Company (OGDC). The Badin operation is spread over the Badin District and surrounding areas include parts of Hyderabad and Thatta districts.

Union Texas Pakistan made its first discovery of oil at Khaskheli in 1981. This discovery constituted a major step in the search of oil reserves outside the traditional Potwar region of the country. Through a string of successful discoveries of oil and gas, Union Texas has been able to establish a new oil basin in the lower Sindh, leading to a new era in the search of hydrocarbons in Pakistan.

The investment in infrastructure and petroleum facilities developed over the last two decades coupled with advanced technological expertise, have allowed Union Texas to succeed in transforming the Badin Concession Block into a major oil and gas producing area in Pakistan.

As a leader in Pakistan's oil and gas industry, Union Texas produces around 45 per cent of country's total domestic oil output and 8 per cent of total gas production. Union Texas has drilled 117 exploration wells as of September 1999 with a success rate of 44 per cent. The company has also drilled 99 appraisal and development wells with a success rate of 89 per cent to date which has led to the discovery of 52 oil and gas fields in Badin Concession Block.

Since the beginning of its operations, Union Texas has pursued an aggressive community development programme to benefit the local population. Union Texas has spent millions of rupees towards the development of infrastructure in the Badin District including the construction of about 500km of roads and 40 bridges. It provided food, equipment, bedding, clothing, tents and other assistance to the local population during natural calamities.

Community development programme of Union Texas encompasses areas of public health and education in District Badin. A number of primary schools and education centers have either been built or upgraded under the company's community development programme.

The importance of oil production from local resources is increasing fast specially in the face of unabated increase in oil prices abroad and consumption within the country. Oil price has taken a quantum jump in the international market which has gone to the current level of $24 per barrel from $6.5 per barrel within a short period of one year. This alarming trend of price hike is likely to persist even next year. The surge in oil price is feared to add over half a billion dollars to the estimated oil import bill of Pakistan this year.

Actually, the constant outflow of foreign exchange is mainly due to reliance on brotherly Muslim countries for oil imports on concessionary rates. Unfortunately, by using this facility as a breathing space, we did not develop of our own oil resources and continued to rely on short term gains. The remedy lies in accelerating the pace of oil exploration which obviously requires investment on a massive scale. To make Pakistan self-sufficient in oil production, situation demands confidence building of the investors by announcing long-term and consistent policies.

Historically speaking, the energy policies, announced by different governments in the past, attracted a large number foreign companies which are currently engaged in exploration of oil and gas in Pakistan. In view of ever increasing demand for oil and gas, massive investment is required to tap the real potential the country has.