Oct 10 - 16, 2005

Pakistan Petroleum Ltd (PPL) remains a leader in the country's oil and gas exploration and production sector since it started operations on July 1, 1952.

From the discovery of the Sui gas field in June 1955 - the seventh largest in the world at that time - to its series of other important discoveries over the years, PPL has moved from strength to strength, playing a vital role in Pakistan's economic development.

In recent years, PPL has intensified efforts to increase its hydrocarbon production to keep pace with the growing energy needs of Pakistan's rising economy.

With the country's economy entering into a higher growth trajectory of six to eight percent over the last three years, never before there has been such urgency and need to expand cheap and environment friendly indigenous energy sources to match the booming demand.

Therefore, PPL, which enjoys a 28 percent share in the country's gas supply, has envisaged plans for aggressive and extensive exploration to add new hydrocarbon reserves and optimize production.

This focused and aggressive approach is vital for the progress and prosperity of the Company, as well as for Pakistan at a time when high world oil prices pose one of the most formidable challenges to the economies across the globe.

To meet these new challenges, PPL has chalked out a dynamic exploration and development strategy with a close focus on enhancing reserve replenishment ratio, improving drilling to discovery ratio and introducing production efficiencies through use of modern production techniques.

In 2004/05 (July-June), PPL boosted exploration activities by 50 percent, compared with the past year, allocating 2,050 million rupees for this purpose. During the year, it carried out exploration at 15 blocks. In the coming years, the Company plans to be active in at least 20 blocks to ensure that it maintains an edge as a leader in the country's energy sector.

PPL, which owns and operates Sui, Kandhkot and Mazarani Gas Fields and produces natural gas, Natural Gas Liquids (NGL), crude oil and Liquefied Petroleum Gas (LPG) from its joint-venture Adhi Field near Chakwal, has won four more explorations blocks through competitive bidding as an operator.

PPL has also won operatorship of another exploration block in Dadhar, where the previous operator was unable to work for three years because of the security problems. But the Company has overcome this challenge, completed all the field surveys successfully and has already finished magnetic, gravity and seismic surveys. And now drilling of a well, each in Dadhar and Kot Sarang, will start in first quarter of 2006.

Oil and gas reserves have also been found from the successful drilling of the Manzalai-1 and Makori-1 test wells in Tal block in the North West Frontier Province where PPL is a joint-venture partner.

The Extended Well Testing is underway by the operator MOL Pakistan Oil & Gas Co. B.V. to assess the reserves of Manzalai-l, from where a supply of 30 million cubic feet gas per day has started. The operator has built a 78-km long gas pipeline and installed processing facilities at Gurguri.

The drilling at Manzalai-2 -- an appraisal well - is on, while there were plans to drill two more test wells.

The marking of 50 years of Sui Gas Field production in itself is a phenomenal achievement. This field has proved a mainstay of the country's energy sector and a major driver of its economy for five long decades.

Gas from Sui field, which produces 700 MMscf of gas daily, has become the second name of natural gas in Pakistan and to date remains the country's largest reserves.

The Company's current hydrocarbon production in terms of energy is equivalent to around 173,000 barrels of crude oil per day.

As it looks ahead, PPL also plans to go into oil and gas exploration ventures in Middle East, eastern and northern African countries, besides increasing these activities within the country. For this purpose, a new Venture Cell has been established.

PPL has also been vigorously trying to fulfill its role as a responsible corporate citizen. It has setup a PPL Welfare Trust, which undertakes community development and welfare projects especially for the people living around its operational and concession areas.

PPL Welfare Trust's focus is on the specified sectors, including that of health, education, and infrastructure development. These projects are under-taken in consultation with all stakeholders -- particularly the local community.

During the financial year 2004-05 (July-June), PPL has spent millions of rupees on several development and social welfare projects and as donations to various organizations promoting such activities.