Pakistan seeks investment in oil and gas sector

ISLAMABAD: Pakistan has sought local and foreign investment in oil and gas sector, as there is huge potential in the sector and the government is offering good prices to the oil and gas exploration and production companies.

Minister for Petroleum and Natural Resources Ghulam Sarwar Khan said this while speaking at a one-day international conference tiled ‘Pak Oil & Gas, Igniting Growth’ jointly organised by the Byco Petroleum and Jang Group of Newspapers here Monday.

The minister said the mission of the government is to promote investment in energy sector to ensure the availability of and security of sustainable supply of oil and gas for economic development and strategic requirements of the country.

“We are striving for making Pakistan an investment friendly country, following the policy of good governance in the energy sector and mitigating energy shortages. Despite being blessed with several gas discoveries since the country’s independence, the growth in energy demand is exceeding the domestic oil and gas supply sources. Pakistan imports nearly 80 percent of energy requirements from international market. The country’s demand for energy has been increasing by 8 percent a year,” Ghulam Sarwar said.

The minister further said the government is working towards better oil and gas exploration in Pakistan and new blocks will be offered very soon for exploration. “Pakistan provides a level playing field for all the E&P companies and even state-owned companies also have to participate in bidding rounds and compete with other companies,” he said.

The minister said that prices offered to the E&P companies for gas discoveries is the best in the region besides many other incentives. He said that Pakistan has a total sedimentary of 827,000 square kilometres. He said the area under exploration is 361,000 square kilometres and around 1,100 exploratory wells have been drilled in Pakistan so far. He said that despite low density of wells, Pakistan’s oil and gas discoveries success is one out of 3.2 wells.

Pakistan’s indigenous gas production is four billion cubic feet per day. Crude oil production is 95,000 barrels per day which meets 15 percent c of country’s demands. “With the establishment of the CPEC infrastructure projects and industrial zones around the CPEC, there would be tremendous increase in demand for petroleum products especially in transport sector,” said the minister.

Presently, he said, an offshore well in ultra-deep waters near Karachi is being spud in a joint venture by four companies including Exxon Mobil, ENI, OGDCL and PPL. “We have high hopes of it,” he said.

The minister said a USAID study has established 95 trillion cubic feet (TCF) of gas and 14 billion barrels oil technically recoverable in Indus Basin. “Study for remaining parts of the country will be conducted in next phase. Pakistan needs assistance of interested foreign E&P companies in this field to economically exploit these non-conventional hydrocarbon resources,” he said.

Pakistan has recently signed an MoU with a major Russian company to establish a $10 billion offshore gas pipeline. “Work on TAPI is progressing and is major important project for us. We are also working on other pipeline and storage projects too. This provides huge investment opportunities to investors,” Ghulam Sarwar said.

The minister said the government has also established an ‘energy task force’ to make the energy supplies in the country affordable, reliable and sustainable and soon this task force would provide a comprehensive roadmap to help address the energy issues. He further said that Pakistan does not have deep conversion refinery. Five local refineries which are basically hydro-skimming produce only 12 million tons per annum of petroleum products against the current demand of over 25 million tons. “Pakistan needs to be self-sufficient in refined oil products. The government has decided to completely phase out the furnace oil in the thermal power plants. The existing oil refineries in Pakistan will have to reconfigure themselves to reduce the production of furnace oil,” he said.

The upcoming mega refineries with cooperation of brotherly Saudi Arabia and UAE and expansion in other refineries and retail chain will help in meeting the local demand and also exporting it to regional markets. The minister also commended the role of Jang Group for holding this successful oil and gas conference in which various ambassadors, oil and gas experts and local and foreign investors participated.