Exploration operations: Attacks in Balochistan hamper gas production

Analysts say government should provide security.

KARACHI:

Attacks on exploration and production companies in Balochistan have further slowed down production of gas in a country which badly needs to produce gas to overcome its power crisis.

The Thursday attack on Oil and Gas Development Company Limited (OGDC) vehicle, in which two employees were killed, was also part of the spate against oil and gas exploration companies operating in the province.

Analyst at Invest Capital Market Ltd, Farhan Bashir Khan said the pace of gas exploration is already very slow in Balochistan owing to security reasons, but the recent attacks are all capable of further slowing down the progress on projects.

“It is the government’s responsibility to take the projects further and give security to concerned staff, especially where gas reserves are proven,” he stressed.

Khan said that the production of gas is satisfactory in Sindh and Khyber-Pakhtunkhwa provinces but the set back in Balochistan has badly added to the shortfall of gas in the country.

“The short fall in gas in increasingly concerning for Pakistan owing to the sharp rise in gas demand,” he said.

The shortfall of gas has also affected the power sector, which consumes over one fourth of total gas production in country. Pakistan produces around 4,000 millions cubic feet per day (mmcfd) gas annually out of which 1,000 mmcfd is consumed by power sector, a sector where government wants to divert more gas, he added.

Atif Zafar, analyst at JS Global Capital Limited said that problems in gas exploration in Balochistan is hampering the government plans to produce power from gas. “We cannot import gas immediately from Iran and the only available option that we have is to rely on our own gas reserves to produce power”.

OGDC officials say that the facilities of OGDC in Balochistan have been attacked more than 70 times in the last few months that forced company to stopped work many occasions. Officials also say that the attacks have sharply increased in the current year compared to the last.

Government gave clearance to OGDC to start drilling in Zin block in 2010, located in troubled Dera Bugti district, more than six years after a survey suggested presence of large quantity of hydrocarbon reserves there.

Analysts say that explorations and production is already slow in Balochistan while the public sector companies, OGDC and Pakistan Petroleum Companies (PPL), are both facing security issues.  Earlier, Sui gas fields used to supply approximately 50% of Pakistan’s gas supply, but due to fast depleting reserves, the need for importing gas or finding new reserves has become significantly important.





Published in The Express Tribune, July 24^th, 2011.