ISLAMABAD: Revival of exploration and production activities in the country is key objective of the incumbent government to tap resources in vastly unexplored areas, energy minister said on Thursday.
“Onset of E&P activities would also help to expand oil and gas business, create job opportunities in the country as well as possible decrease in import bill,” Minister for Energy Omar Ayub said during a meeting with heads of E&P companies. Representatives from Dewan Group, Orient Petroleum, Oil and Gas Development Company, Pakistan Petroleum Limited, Mari Petroleum, Petroleum Exploration Company and PGiNG participated in the meeting.
The country offers huge potential for the exploration and production of oil and gas, according to the petroleum division. Around 96 percent of the country’s exploration wells have been drilled in Kohat and Potwar basins and the lower and middle Indus basin.
“Only 4 percent of the remaining exploration well been drilled in other basins. Vast areas in the province of Balochistan, Punjab and Khyber Pakhtunkhwa remain unexplored,” said the report by the petroleum division. Energy minister said the current government aims at self-sufficiency in the oil and gas by auctioning new oil and gas blocks and expediting the output of E&P sector.
The meeting also discussed the new bidding rounds of oil and gas blocks including off shore blocks, revocation of existing blocks and amendment in Public Procurement Regulatory Authority rules for oil and gas state-owned enterprises.
Pakistan’s E&P sector has a mix of national and international companies (24 active companies as of June 2019) operating independently. Total 37 exploratory wells and 67 appraisal/development wells were spudded in 2019. In terms of production, the average oil and gas production in 2019 stood at 89,030 barrels per day and 3.9 billion metric cubic feet per day, whereas, the remaining recoverable oil and gas reserves are 568 millions of barrels and 21.45 trillion cubic feet, respectively. Oil and Gas Development Company remains the largest exploration and production company in the country, with a 45.3 percent and 29.2 percent share of the total annual oil and gas production in the country. MOL is the largest private and second largest oil producing company in the country with a production share of 24 percent. Pakistan Petroleum is the second highest gas producing company in the country with a 19.3 percent production share.
The petroleum division has formulated a new petroleum exploration and production policy that contains various incentives to attract foreign direct investment/potential investors. Under the new policy awaiting approval, the period of exploration licence has been reduced from 9 years to 7 years. Similarly, appraisal renewal period has been reduced from two years to one year. Better gas price has been given to E&P companies in order to attract more investment. Windfall levy was reduced from 50 percent to 40 percent. Base price for crude oil and condensate increased from $30/barrel to $40/barrel. Base price will escalate each calendar year by $0.5/barrel. Ceiling of $100/barrel was replaced with $110/barrel.