Exploration will be conducted in Indus Block "G" No.2265-1 covering an area of 7,466 kilometers


Aug 18 - 24, 2003



The first-ever off shore exploration (for oil) agreement was signed by Pakistan with a consortium of international companies led by the largest French multinational namely Total. The agreement was signed in Paris on the occasion of President Musharraf's visit to France last month and the exploration in the ultra deep water of Indus Delta South of Karachi is to start soon.The other partners of the consortium are Petronas Cargali of Malaysia, OMV of Austria, OGDCL and Mari Gas Company of Pakistan.

The production sharing pacts will prove to be a milestone in the petroleum exploration history of Pakistan as Pakistani seashore has remained unexplored so far where chances of hitting big reservoirs of crude oil or gas cannot be ruled out. The interest shown by the international multinationals indicates that chances are bright in the region of Indus Delta.

Under the first agreement, exploration will be conducted in Indus Block "G" No.2265-1 covering an area of 7,466 kilometers while other agreement relates to Indus Block "H" No.2165-1 covering an area of 7,130 kilometers. Both the areas are located in the south of Karachi at a distance of about 200 kilometers in the depth ranging between 1,700 to 3,400 meters.

The lion share in the pact is held by Total to the tune of 40% while Petronas Cargali has 30%, OMV 15%, OGDCL 10% and Mari Gas 5%. The blocks are situated in the relatively difficult area where the latest technology will be used to explore the hydrocarbon resources.

The work will be started with the drilling of one exploration well during the upcoming fair-weather window with a cost of $30 million starting from October this year. The explorers have invested $10 million on seismic, geological and geophysical surveys and other related works.



According to petroleum experts Pakistan is going to launch such a project for the first time in the deep waters and in case of commercial discovery two to three billion dollars are expected to be invested in this field. The discovery will lead further to opening of this area for more exploration as off-shores of the country had remained untouched, with no knowledge of its real potential.

Pakistan has offered great incentives in the field of oil and gas discoveries based on progressive production sharing regime. This agreement is in response to these offers, which is unique in nature and potential. With this agreement new advanced technologies will be attracted to this, which can change the fate of the nation in the economic field.

The involvement of many multinationals in the project demonstrates the confidence of the investors in Pakistan's growing market due to reforms introduced by the government.

Secretary Petroleum Abdullah Yusuf while taking to newsmen termed it an historic one "as it is the first such agreement that too with a French company". More investment is expected to the tune of $2 billion, if the drilling is successful. The region will become attractive for other investors in case of the successful commercial discovery, he added.

Pakistan is proceeding ahead with satisfactory pace in the field of hydrocarbon. Refineries are coming up and pipelines are being laid to carry gas and oil to the important destinations. Big discoveries have been made in gas filed, particularly in Sindh and works on use of Thar coal reserves have been started.

The oil production of OGDCL has touched 5,922,059 barrels during the first nine months of last fiscal year showing an increase by 7% as compared to the corresponding period. Since March 2002, the OGDCL has made eight new gas and oil discoveries in Sindh province. The OGDCL is also producing 200,217 million cubic feet gas per day, 50,944 tones of LPG and 12,083 tones of sulphur. The company's remaining recoverable reserves as of December 2002 comprised of 10.05 trillion cubic feet of gas and 145 million barrels of oil.

Recently, a renowned Chinese oil & gas company, Sichuan Petroleum Administration (SPA) has been awarded a contract to drill two wells for the enhanced-capacity plant.

At Qadirpur Gas field, the company has shifted its brand new rig to the site to drill up to depth of 5000 meters.

Ch Noriaz Shakoor, Minister for Petroleum and Natural Resources has said formal inauguration of construction gas supply to Sui Southern Gas Company and Sui Northern Gas Pipelines Limited from Zamzama Phase-I will be held in first week of September. The BHP Building has started gas delivery to customers from Zamzama Phase-I in Sindh, which has commissioned nearly four months ahead of schedule.Pakistan and Russia's largest petroleum company Gazprom have also signed a Memorandum of Understanding to cooperate in oil and gas exploration in the country.



Pakistan is a fuel deficient country, which requires extra-ordinary measures to boost hydrocarbon resources and storage facilities. The undergoing projects in this sector will be helpful to meet the country's demand to some extent. However, more projects are required to reduce the ever-increasing oil bill to save the well-needed foreign exchange of the country.