OUTLOOK FOR 1999-2000


June 28 - July 04,1999

The private sector investment in Oil and Gas sectors, augmented by foreign investors, is likely to be the outstanding feature during 1999-2000.

Government's intention to privatize Oil and Gas Development Corporation (OGDC) and Pakistan Petroleum Ltd (PPL) during the period under discussion may be the centre of attraction for the investors from external resources.

On the local front, the government has estimated a gain a 6,236 Barrel Per Day (BPD) in the production of crude oil during 1999-2000. Oil production during 1998-99 was 55,422 BPD against the target of 61,904 BPD, showing 89.5 per cent achievement.

Gas production during 1999-2000 is planned to be 2,404 million cubic feet per day against the estimated production of 2,024 mmcfd in 1998-99 showing an increase of 18.8 per cent.

In all 45 wells, both in public and private sectors, are to be drilled during 1999-2000 comprising 20 exploratory and 25 appraisal and development wells.

The LPG production in the coming year is estimated at 656 tonnes per day while in the outgoing year the production of LPG was 478 tonnes per day which was 82.4 per cent of the production target. The Union Texas Pakistan is also working on development of a LPG project near Hyderabad.


Attock Refinery's upgradation and expansion work has been completed. The commissioning of these units will increase its refining capacity to 35,000 BPD. The upgradation and expansion, comprising two new plants, catalystic reformer and heavy crude unit which have been completed and ready for commissioning.

With the increase capacity of 35,000 BPD, the refinery shall process the entire crude oil produced in the northern region while balance requirements being fulfilled by transporting crude from Southern region, which would yield substantial freight savings to the government.

In the next year, the company proposes to automate its tank gauging system for crude oil and products through a three-year phased porogramme to benefit from technology and improve efficiency/safety as well as reducing operational costs.

The government in order to tap the potential of the energy sector, both in terms of surcharge revenue and its production which is significant to industrial growth of the country, has chalked out a comprehensive development plan for 1999-2000. A budget target of Rs63.3 billion, which is 48.4 per cent higher as compared with Rs43.4 billion for the out going year, has been estimated.

The development plan has an objective to increase crude oil as well as natural gas production during the year. This plan envisages to add at least 6,000 barrels of crude per day to the existing production of 5,422 barrels a day.

The petroleum sector experts are describing the targets as realistic and achievable. Since six new gas fields are in their final stages of completion, the government targets to increase the existing production of 2,024 mmcfd to 2,404 mmcfd is an easy target and chances are there that the gas production may go far ahead of the target set by the government.

Among the developing gasfields, the Uch gasfield operated by Oil and Gas Development Cooperation (OGDC) is likely to go in to production of about 250 mmcfd within next two months, while other fields which are also near completion may add a substantial amount of the much needed gas to the main supply system.

The oil sector alone plays a leading role in Pakistan's economy and its significance is reflected in collection of revenue surcharge which was estimated at Rs73.3 billion during 1998-99.

Another important development, which is expected in 1999-2000, is the handing over of the two major state owned oil and gas producers, currently being run by the government. These include Pakistan Petroleum Ltd (PPL) and Oil and Gas Development Corporation (OGDC). Out of the two, PPL alone occupies gas deposits worth over $5 billion besides valuable assets owned by the PPL. As far as OGDC's worth is concerned, upto June 1998, it had drilled 140 exploration wells, 217 developments wells and secured 43 discoveries. Its gas and oil production capacity one year back was 24,363 barrel of crude per day, 471 mmcfd of natural gas, 235 tonnes of liquified petroleum gas (LPG) per day and 43 tonnes of sulphure per day. The sales revenue during that year was estimated at Rs16.018 billion and operating profit at Rs7.432 billion.

The OGDC was established by the government in1961 to undertake the exploration and development of oil and gas resources in the country. The government has invited the private sector bidders to send their "Expression of Interest" latest by July 10, 999.

Since both, the PPL and the OGDC, are making profits of respectable amount, they are considered as gold mines in the energy sector. The government desires to divest these valuables to infuse a booming spirit in the business activities in the private sector.