In sum, the era of cheap oil and gas and easy discoveries is over
PAKISTAN PETROLEUM LIMITED: Apropos the opinion piece “Do we need foreign companies to explore oil” appearing in these columns, the Pakistan Petroleum Limited (PPL) offers some clarifications for the benefit of readers.
Contrary to the impression given by the writer, the PPL and the Oil and Gas Development Company Limited (OGDCL) played a proactive role in the deep offshore well Kekra-1 as per the Joint Operating Agreement under Production Sharing Agreement and best practices of the E&P industry. As such, both state-owned companies followed a thorough due diligence and decision-making process, with priority given to organisational and national interest.
Despite the fact that Kekra-1 was a challenging deep offshore well, operator ENI along with joint venture partners PPL, OGDCL and Exxon Mobil drilled it successfully. That said, pressure gradient data confirmed the presence of a water-bearing reservoir so there is no question of oil- and gas water separation as suggested by the writer.
Foreign companies have been operating in Pakistan for many decades and producing hydrocarbons under rigorous monitoring of the Directorate General of Petroleum Concessions, Ministry of Energy which has led to successful balancing of influence versus contributions by foreign operators.
Moreover, Pakistan does not possess the technology for deep offshore drilling which is cutting- edge and capital-intensive and so the two state-owned companies cannot undertake this challenging task without foreign participation.
In sum, the era of cheap oil and gas and easy discoveries is over, and high-risk frontier areas must be explored for which foreign investment and specialised technology transfer through foreign operators is not only preferable but mandatory.
Corporate Communications Dept
Published in The Express Tribune, May 28th, 2019.
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