ISLAMABAD: Pakistan has received investment of around Rs1.6 trillion in the oil and gas exploration sector in a very short span of time, informed Minister of Petroleum and Natural Resources Shahid Khaqan Abbasi to the National Assembly on Wednesday.
During a question-answer session, he said that a total of 82 oil and gas discoveries had been made during the last three fiscal years.
“Production from 45 out of the 82 discoveries has already begun, whereas necessary work on 37 discoveries is being carried out by the Exploration and Production companies in order to start production,” he said.
According to the minister, drilling had increased by 46% along with 36% increase in the 2D and 3D explorations. “The ban on commercial gas connections will be lifted soon after the arrival of more gas in the system,” he said.
He said despite the decrease in the prices of petroleum products at the international level, Pakistan was expected to continue receiving investment in the oil and gas sector which would help explore indigenous resources in the country.
“The local production of crude oil has surged to 100,000 barrels per day, which meets 15% of the country’s requirement. Exploration activities have also been expedited; especially in Khyber-Pakhtunkhwa (K-P) province, which has led to some important discoveries,” he said.
The petroleum minister said the government was encouraging investors to establish new refineries in the country and two would be established soon. “Establishment of refineries in Karachi and Balochistan would also help reduce the import bill of refined products.”
He said there was no ban on any domestic gas connections and the issue of shortage had been overcome to a great extent.
Moreover, he said a comprehensive strategy was being devised in consultation with gas utility companies to ensure uninterrupted supply of gas to domestic and commercial sectors during the upcoming winter season.
“With the injection of gas from new discoveries and establishment of the second LNG terminal, the situation of gas demand and supply would be better next winter,” he said.
“About 46 new blocks have been awarded under the Petroleum Policy 2012 to expedite exploration activities, while clearance process has been initiated for awarding 32 new exploration blocks to the E&P companies through a bidding process,” he added.
“Also, the producer gas price under the Petroleum Policy 2012 has been increased from 31% to 68% for different zones.”
As for the new exploration efforts in old blocks, Abbasi said that supplemental agreements had been signed for the conversion to the Petroleum Policy 2012 price. “The bonanza of $ per mmbtu has been introduced for the first three discoveries in the offshore area.”
He said the windfall levy had reduced from 50% to 40% while the lease could be extended for another five years after expiry, subject to payment of 15% the amount of well head value.
The petroleum minister hoped the exploration and production activities under the Policy 2012 would bring new oil and gas discoveries and reduce the import bill of crude oil.
Published in The Express Tribune, September 8th, 2016.