OIL EXPLORATION — EXTENSIVE AMERICAS IN THE FOCUS
Pakistan to offer 20 offshore blocs for oil and gas exploration at London conference
By ASHRAF KHAN
May 09 - 15, 2005
After remaining one of the least explored regions, Pakistani authorities have now shifted their focus to far-flung Americas in a hope to lure exploratory companies into the country. The President of Pakistan made a surprising visit to Latin American countries late 2004 including Argentina and Brazil. This was first-ever visit of any head of state from Pakistan and as such nothing magically happened except signing of few protocols. However, in the area of oil & gas, it appears that the agenda was well thought of and planned much prior to the stated visit. G. A. Sabri, Director General — Petroleum Concessions (DGPC) also made a part of the presidential team which later joined by Munsif Raza, Managing Director — Pakistan Petroleum Limited (MD PPL) and his four-key staff members who were summoned for discussions with relevant officials of Petrobras. The company performs exploration and production work in seven countries including Angola, Bolivia, Colombia, Nigeria, Trinidad and Tobago and the US.
Early April 2005, Brazilian Ambassador called upon Minister for Petroleum & Natural Resources where the Minister formally invited Petrobras team to Pakistan. The mission did come immediately and spent a week or so meeting with Ministry officials and oil & gas companies including OGDCL and PPL.
Recently, Petrobras has progressed in its international growth strategy when it acquired the Argentinean companies of Petrolera Santa Fe and Perzez Companc, the largest independent oil company in Latin America. Now, Petroleo Brasileiro SA, Brazil's state-controlled oil producer, is studying offshore oil and natural gas exploration in Pakistan after company officials visited the country recently
The Head of Petrobras delegation Adauto Cameiro Pereira held talks with Pakistani officials for exploring areas of cooperation between the two countries, especially in offshore exploration,' according to the Web site of Pakistan Ministry of Petroleum & Natural Resources. The visit by Petrobras officials to Pakistan, the first by a Brazilian oil and gas company, comes after Pakistan's President Pervez Musharraf meets Brazilian President Luiz Inacio Lula da Silva in November.
Government is trying to offer an attractive package of incentives to the investors in the onshore and offshore oil, gas exploration and production activities and invited many companies.
Pakistan is planning to offer 20 offshore blocs for oil and gas exploration at a conference next week in London. At least 150 oil and gas exploration firms likely to attend the conference.
The ministry officials said that 20 blocs to be offered for bidding are in an offshore area called the Indus Basin, off southern Sindh. The ministry would also award six new licences worth $44 million to foreign companies, all European, to explore for oil and gas in the Indus Basin.
The directorate general petroleum concession has already selected four foreign firms to award six concessions in the Indus Basin. Those blocs are other than the 20 the government planned to offer.
London-based Tullow Oil Pls and Paige Limited will be awarded two exploration licences each, while one concession each will be granted to Premier Oil Pakistan and Natvus.
Foreign firms and Pakistani officials would also discuss downstream opportunities to boost exploration activities.
The government is said to have achieved target to bring $80 million foreign investment in the exploration sector during the fiscal year 2004-05 and expected some good response at the London conference. Pakistan's liberal exploration policy has attracted interest from foreign firms in recent years, making oil and gas the largest foreign investment area.
Foreign firms including Total of France and Austrian OMV are involved in exploration and production of hydrocarbons in the country. But an unsuccessful attempt by a consortium led by French oil major Total to find hydrocarbons in deep water off Karachi last year was a blow for efforts to attract investment.
Pakistan imports 85 percent of its energy needs, including about $3 billion worth of crude a year, and is struggling to increase domestic oil production of about 65,000 barrels a day. It hopes to produce 100,000 barrels a day within five years.
Pakistan also produces 3.5 billion cubic feet of natural gas a day, which meets 50 percent of its total energy needs.
The government had set a target of drilling 100 exploratory wells this year, compared with an average of 55 to 60 a year previously. Pakistan's s proven oil reserves stand at 800 million barrels and scientifically estimated potential reserves of 27 billion barrels. Proven gas reserves are 45 trillion cubic feet and scientifically estimated reserves at 450 trillion cubic feet.