SOCIETY HEALTH AND SAFETY
COLUMN FOR THE RECORD
POLITICS & POLICY 1- REPERCUSSIONS OF US-IRAQ WAR ON PAKISTAN
2-
PM'S VISIT TO CHINA
COMPANY PROFILE 1- A DECADE OF COMMITMENT
2-
MARI GAS COMPANY LIMITED
3-
PSO REGAINS LEADERSHIP ROLE UNDER TARIQ KIRMANI 
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MARI GAS COMPANY LIMITED

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Mar 31 - Apr 06, 2003
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HISTORY AND BACKGROUND

Mari Gas Field is located at Daharki, District Ghotki, approximately 96 Kms North-east of Sukkur. ESSO Eastern Incorporated (EEI) discovered this field in 1957 with the drilling of Mari X-1 to a depth of 2053 feet in the Lower Kirthar ZN-'B' Lime Stone Formation. The field was first developed in 1965 to supply gas to Exxon (now Engro) Chemical Pakistan Limited.

EEI operated the Mari Gas Field as a joint venture with Government of Pakistan (51:49), titled as Pak Stanvac Petroleum Project (PSPP) until 1983. When ESSO decided to sell its investment in Pakistan, its interest was purchased by Fauji Foundation through Government of Pakistan. Hence, Mari Gas Company Limited was incorporated on December 04, 1984 as an un-listed public limited company. It was decided that shares of Mari Gas Company Ltd be held by the Government of Pakistan, Fauji Foundation and Oil & Gas Development Corporation in the ratio of 40:40:20 respectively.

The Government of Pakistan in 1994 divested 20% of its shareholding in favour of general public and the company was listed on all three Stock Exchanges of Pakistan.

MANAGEMENT

The Company is managed by a Board of fourteen Directors, who are elected by the shareholders in proportion to their shareholdings.

In terms of the Articles of Association of the Company, Fauji Foundation has the exclusive right to nominate the Managing Director of the Company. The Managing Director is responsible for running the day to day affairs of the Company. He is assisted by a well organized team of General Managers, Managers, and other staff members, who are qualified and trained in various disciplines of the Company's operations.

DEVELOPMENT OF MARI FIELD

Mari Gas Field, since its discovery in 1957, has shown an impressive progress under the phased development plans. The production facilities, today, consist of 67 producing gas wells, two manifolds, and about 200 Kms of gathering lines. The gas from the field is being supplied to the four major clients, namely, Engro Chemical Pakistan Limited (103 MMSCF/day), Fauji Fertilizer Company Limited (153 MMSCF/day), Pak Saudi Fertilizer Limited (80 MMSCF/day) and WAPDA Guddu Power Plant (90 MMSCF/day).

With the expansion in the operation, the manpower requirement and consequently the personnel strength at the field also increased gradually. The Company, therefore, constructed its own self-contained colony at the field which provides accommodation as well as other amenities like electricity, water, schooling, club/sports facilities and medical cover at our own hospital, to all employees.

ACHIEVEMENTS

Mari Gas Company, over the period, has become a sound revenue generating organization and has earned a good reputation for efficient operations. A brief account of some of its achievements is as follows:

A. DEVELOPMENT PHASES

Mari Field was developed in five phases and with the completion of Phase V the Company is in a position to produce 426 MMSCF/day of natural gas. To Company's credit, all phases were completed in time and the customers have never faced any shortage or shut down since the Company's inception.

B. DRILLING OF DEEP WELLS

In order to explore the deeper horizon of the field, the Company drilled two deep wells as part of Phase V. Gas was discovered in both the wells at the average depth of 9000 feet in Goru B formation. Based on drilling and testing of two deep wells and interpretation of 440 line Kms seismic data, (conducted in 1999) the reserves of discovered gas are estimated at 1.143 T.C.F (proven and probable).

 

 

C. SAVING IN COUNTRY'S FOREIGN EXCHANGE

Over 75% of all urea manufactured indigenously is produced from gas supplied by Mari Gas. This substitutes for the imported fertilizer and saves foreign exchange for the national exchequer.

COMPANY'S INCOME AND ASSETS

Mari Gas is registered as a Public Limited Company with an authorized share capital of Rs 2,500 million. The current paid up capital is Rs 367.5 million. The Company pays a guaranteed return at the rate of 30% to its shareholders. Contribution to the national exchequer, in the form of development surcharge, taxes and other levies is now over Rs 10 billion per annum. The Company so far, has contributed over Rs 60 billion to the Government of Pakistan.

IMPACT ON NATIONAL ECONOMICS AND SOCIAL CONDITIONS

The Company has made significant contribution in the national development by providing raw material to the fertilizer industry and supplying gas to WAPDA for power generation. Besides contributing at national level, the Company is also doing a lot at regional level. It has not only provided jobs to the local population but also created infrastructure in the Daharki area which has helped in local development. The Company has so far provided 225 Kms of unmetalled and about 45 Kms of metalled roads benefiting nearly two hundred thousand local residents. In addition, the Company has also provided medical facilities for the population of the villages in and around the gas field by operating eight Field Dispensaries with qualified physicians. Treatment and medicines are provided free of cost to nearly 60,000 patients annually. Financial aid is also being provided to the educational institutions of the area for raising local literacy level.

FUTURE OUTLOOK

a. For effective reservoir management, the Company has initiated Development Project Phase VI for Shallow Habib Rahi reservoir. The project has been approved by the Company's Board of Directors and the Government approval has been obtained. The scope of the project includes drilling of seventeen shallow gas production wells and conducting a compression study. The additional wells and installation of compression are essential for enhanced gas recovery, maintenance of desired pressure for fertilizer plants and for homogeneous depletion of the field. The total cost of the project is estimated to be US$ 14.2 million. With the development of Phase VI the production capacity of field will also be increased. Drilling of seventeen production wells has commenced on December 20, 2002.

b. With the discovery of gas established through exploratory drilling in the deeper horizon (Goru B Sands) the Company undertook an appraisal programme to assess the extent of the deep gas reservoir. Based on the processing and interpretation of seismic data six deep appraisal wells were drilled. Four of the six wells drilled are gas producers. The two dry deep wells at Goru B level were completed as Habib Rahi producers. The commerciality of the discovery has been approved by the government. Due to poor quality data acquired through 2D Seismic Survey conducted in 1999 a 3D Seismic Survey and drilling of few more appraisal wells was required before full development of the deep reservoir could be undertaken. Phase-1 of the 3D Seismic Survey has been completed. Acquired data has been processed and is being interpreted. If the data quality is good, then the Seismic Survey will be extended to the entire prospective area. The Company at the same time is proceeding with the development of already drilled wells to bring these on production.

c. Mari Gas Company Limited is also actively pursuing exploration, appraisal and development activities outside Mari Gas Field Area. Such activities are financed against a fund generation upto 30% of the Company's annual gross sales revenue with a maximum annual limit of US$ 20 million.

 

 

d. The Company is currently a joint venture partner in the following exploration licenses:

 

BLOCK

SHARE
(%age)

(i)

Ziarat (Operator)

100.00

(ii)

Karsal

22.50

(iii)

Jhamat

25.00

(iv)

Manchar

22.50

The Company is also in advance stage of acquiring a 5% share in two Deep offshore Blocks and onshore Bolan Block which is in reservoir appraisal stage.

The Company is evaluating new acreage as well as other blocks independently to identify potential areas of investments for both on-shore and off-shore prospects.

This is an initial step towards growth and with a dedicated and experienced team of professionals, the Company is striving to expand its exploration activities and consequently its reserve base as well as its development and production operation in the years ahead.

COMPANY PERFORMANCE

According to Wood Mackenzie's Q 3 Indian Sub Continent Upstream Report, covering the period July 1995 to June 2002, Mari Gas Company Limited:

a. Invested only US$ 12 million but discovered 22% of the total reserves.
b. Discovered the second largest reserve with Mari Deep field.
c. Ranks first in the operator rankings with the lowest finding cost of only US# 0.04 per boe reserves discovered.
d. Had been a successful player in the exploration sector in Pakistan.