MOL Group to invest $23 million in KP’s Tal block for E&P activities

ISLAMABAD: Hungary-based oil and exploration company MOL has announced $23 million more investment in the Tal block in Khyber Pakhtunkhwa to inculcate impetus to indigenous oil and gas exploration and production, which could assist in mitigation of energy shortages in the country.

The development came amid a statement that Secretary Petroleum gave to NA penal on petroleum on Thursday that Pakistan was a high-risk country for new investment.

The bidding process for an exploratory well ‘Razgir’ has begun, which would cost the TAL joint venture $23 million. MOL’s top management disclosed that in a correspondence to Prime Minister Mian Shehbaz Sharif.

MOL wrote to the top man of the government heralding re-commencement of investment in the Tal block in KP province, after a pause of two and half years because of a pricing issue. The incumbent regime has resolved the pricing issue paving way for more investments in E&P activities in the country.

MOL Group of Hungary, through its subsidiary MOL Oil & Gas Co Pakistan, has been actively engaged in Pakistan's oil and gas sector since 1999 and with its local joint venture partners; OGDCL, PPL, GHPL and POL contributing significantly to the energy security of Pakistan.

MOL produces 23 percent oil, 9 percent gas, and 25 percent LPG, making its Tal JV block in KP the largest hydrocarbon-producing block in the country.

MOL and its joint venture partners have so far invested $2.8 billion in Pakistan and are paying over Rs50 billion to the national exchequer annually in the form of taxes, royalties, and CSR contributions besides savings of over one billion US dollars in foreign exchange through oil import substitution.

The letter written by Ali Murtaza Abbas, the company’s regional vice president Middle East, Africa, and Pakistan, also mentioned that MOL Group deeply had appreciated a recent decision of the government of Pakistan headed by Prime Minister Shehbaz Sharif, approving the sale of gas from MOL's Mamikhel South discovery to a third party in accordance with provisions of Tal joint venture petroleum concession agreement (PCA). The gas sales agreement for the same stands executed.

As a result of the confidence-boosting measure, as per the letter, MOL Pakistan felt immense pleasure in announcing the re-commencement of its exploration activities in Tal block, which had remained on hold due to the non-resolution of the long pending Mamikhel South gas pricing issue.

The decision would prove to be vital in providing the much-needed impetus to indigenous oil and gas exploration and production and would further assist in the mitigation of energy shortages in the country. “We have further started the bidding for our next exploratory well, “Razgir”, which would cost the TAL JV USD 23 million.”

The letter also appreciated the vision and foresight displayed by Shahid Khagan Abbasi, Chairman Prime Minister's Energy Task Force, who supported MOL's principled stand as being in line with the relevant provisions of Tal JV PCA.