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
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.