HASCOL CHAIRMAN TALKS ABOUT BALOCHISTAN'S ENERGY POTENTIAL
TARIQ AHMED SAEEDI
Aug 15 - 21, 2011
Balochistan was annexed to Pakistan on the accession agreement signed by Khan of Kalat. His brother Prince Abdul Karim rejected the agreement null and void as he along with some other estranged Balochis showed tough resistance to Pakistan Army when it stepped in Kalat to assume its control in early days of India-Pakistan partition. It was said that Muslim League had also consented to the Kalat's independence status.
Prince Karim is known to his successors for his bearing the torch for the rights of people of Balochistan.
The unfolding days were not less anarchic. In 1958 when a final death knell to the self-governing provincial governments was sounded in the shape of One-Unit, the old-days Kalat re-echoed with state force and civilian battle.
A third-generation resistance erupted in Bhutto's regime and that one was incomparable in severity and decimated only when Iran extended military assistance to Pakistan.
While reading anyone of the chapters of the life of Balochistan or Kalat after partition, one would find frequent conflict of interests, mistrusts, and public animus towards the state policies.
No one side can be absolved from the responsibility of coming together to a point where every reproaching act from perhaps either side seems to go bust. While psychological wounds that have been festering for decades cannot be healed in days or years, yet an honest effort can still be put up to mend the path leading towards the point of convergence and centre-province and province-province harmonies.
Economic indicators in Balochistan are most devastating when compared them to other provinces. In terms of education, health, and basic utilities the province also lags behind the other provinces.
The country's largest province in terms of area possesses a plenty of mineral and energy resources that if tapped can bring about an implied economic prosperity. The province remained a major source of gas supply to the country when natural gas was not explored in mainly Sindh. It is worthwhile to note that although oil and gas companies have not hit single mega find in Pakistan so far, there is a belief Balochistan has the potential to turn out mega oil and gas reserves.
Medium-sized oil and gas companies are working in the province but due to constant security threats especially in Marri and Bugti territories they are not involved in full-fledged development and production.
For the special issue on 14th August, Pakistan and Gulf Economist (PAGE) interviewed Chairman Hascol Petroleum, Mumtaz Hasan Khan to know his expert opinions on the energy prospects of Pakistan in general and Balochistan in particular. His was the terse remark over the present situation in Balochistan.
He said, "Local stakeholders should be involved directly and indirectly to explore and cash in on the provincial resources". He is against the use of brute force and strongly in favour of paradigm shift. "You can't control every thing with brute force. There is a need for the [central] government to change its mindset," he said plainly. "Once they (local people) have stakes in developments, they would not cause harm or not create nuisance."
Chairman Hascol, who has over 40 years exposure to local and foreign oil industry, agreed that no big finds had been explored in Pakistan so far. However, he got a hunch of extraordinary oil and gas breakthroughs mainly in offshore and Balochistan fields. Most promising areas are lying unexplored in Balochistan because of the disturbed law and order situation, he deplored. Besides, the governmentís incentives to exploration and production companies are also not attractive, he maintained.
Gas production has been dead slow due to frequent attacks on installations in the province. The country's largest oil and gas producer oil and gas development company of Pakistan (OGDC) has reported more than 70 attacks on its facilities during last few months.
Revealing the commercial viability of oil and gas wells in Pakistan, chairman Hascol said if one well gives outturn out of ten wells, then the project is considered commercially viable as per the international standards. Fortunately, this ratio is awesome in Pakistan as one well gets operational on drilling three in a row, continued Khan. Unfortunately, there is yet to surface a mega find, he added. That said why only medium-sized companies are engaged in exploration and production (E&P) sector in Pakistan.
Mr. Khan was quite convinced that Thar coal project would take much time to be materialised. Importantly, he did not think that conversion of coal to diesel would be an inexpensive option. "By the time, the idea will come to fruition, output price may equate that of international crude oil price," emphasised chairman Hascol, which is a oil marketing company earning money primarily from sale of diesel and furnace oil. "It [Thar coal] is a capital intensive project that has no infrastructure base."
About the existing national energy crisis, Khan said the government was reluctant to take tough decision in the national interest. He called for prioritised distribution of gas. It is an irony that the government is allocating gas to CNG sector but not to fertiliser industry. He also dismayed over what he said sheer wastage of gas in domestic sector. No where in Asia natural gas is wasted on fuelling geezers an heaters, he underscored. "Renewable technologies should be harnessed alternatively, like regional nations do, to save wasted gas of 200 million metre cubic feet per day."
Chairman Hascol was in favour of restructuring of administration related to oil and gas sector. Illustrating his viewpoint, the veteran entrepreneur-who also heads Sigma Motors the sole distributor of high-end Land Rovers in Pakistan-recalled the famous Integrated Energy Plan 2009 that discussed all energy solutions the country could tap to overcome energy shortfall. He was a member of the group that prepared a detailed report. "We have already recommended the government that it should establish National Energy Authority that must be responsible for planning and implementation of energy-related policies. Water and power and petroleum ministries should be merged," he explained. The report is lying with the planning commission. Lack of coordination is a major issue that will be addressed if energy sector is viewed on integrated basis, he believed.
In his conclusion remarks, chairman Hascol said tight gas is an attraction for investors, adding the government must provide incentives, proper policy framework, fair tax structure, and security to investors.