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October 24, 2018
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Govt to place 10 oil & gas exploration blocks for bidding

National

October 24, 2018

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ISLAMABAD: The government is going to hold competitive bidding for 10 oil and gas exploration blocks on November 12, 2018 in which local and international companies would take part, official of the Ministry of Petroleum told The News Tuesday.

The government has pinpointed 46 blocks in all provinces and one in Islamabad Capital Territory. Of them, the Ministry of Defence has cleared 35 blocks in which these 10 blocks would be placed for bidding next month.

The government has also invited Saudi oil and gas development companies to invest in them as they have good experience in drilling and exploration.

It would be the first auction of this government in oil and gas sector, aimed at exploration and developing domestic oil and gas sector and boost local production and reduce reliance on its imports. Every year, Islamabad is spending billions of dollars on LNG and other petroleum products’ imports.

According to the Pakistan Bureau of Statistics (PBS), during last financial year (July/June 2017-18), the petroleum group (including petroleum products, crude oil, LNG and LPG) import bill was huge $10.93 billion and is increasing with the energy demands of the economy.

The previous PML-N government in its five-year tenure did not lease out any block, sighting the security issues in the country. Interestingly, despite in 2013 law and order situation was worst, but same year in March the Pakistan Peoples’ Party (PPP)-led government leased out around fifty such exploration blocks.

Due to not granting the leases, the provinces have lost billions of rupees in shape of not getting royalty and gas development surcharges (GDS). Interestingly, there are many leases which were granted to companies before 2012 but have not been renewed.

Pakistan’s current local crude oil production is 90,000 barrels a day. Natural gas production is around 4 billion cubic feet/day and is reducing and is estimated to reduce 2.2 bcfd while demand to rise to 8 bcfd by 2021.

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