Govt to conduct audit of dry wells
This comes at a time when company profits are coming under pressure. PHOTO: fb.com/OGDCL
Amid a looming gas crisis, the government has decided to conduct a forensic audit of dry wells in a bid to analyse the potential of gas in wells of oil and gas exploration companies.
Earlier, past governments had also worked on that formula but they were unable to implement it.
According to analysts, there are technologies available in the world that can exploit oil and gas reserves from dry wells. They said that the dry wells had a potential for 20% of total reserves to be tapped.
However, the oil and gas exploration companies will seek additional incentives in this regard because the technology required to achieve the desired results is not currently available in Pakistan.
The country is currently facing a shortage of gas and is dependent on expensive import of liquefied natural gas (LNG). According to Special Assistant to Prime Minister on Petroleum Nadeem Babar, domestic gas reserves are depleting at a pace of 6.5% per annum. Owing to this, the country is shifting to expensive gas.
However, the more alarming development is that the government is diverting LNG to domestic consumers to overcome the gas crisis in winter. This comes despite the fact that the government does not have a legal framework to recover the higher gas price from the domestic consumers.
Now, the government is seeking support of provinces to introduce a weighted average gas pricing mechanism. However, the provinces have so far not given their consent.
Officials said that the government was making desperate efforts to revive the wells that were already dry. The Pakistan Tehreek-e-Insaf (PTI) government blames previous political administrations for ignoring the domestic oil and gas production. Oil and Gas Development Company (OGDC) has shut down several wells. A team will identify wells of all other companies as well to analyse the potential of gas production.
According to a statement, the Petroleum Division on Wednesday gave directives for constituting a team of experts and professionals to conduct the forensic audit of wells that had been shut down.
The team will comprise representatives of public sector exploration and production companies and officers of the policy wing. It will analyse wells of all exploration and production companies that had been closed down.
The committee, to be headed by former OGDC MD Dr Naseem Ahmed, will ascertain the reasons behind the closed wells and will submit its report within a month.
The team will visit the shut-in wells throughout the country and technically evaluate the status of wells. It will also conduct a forensic audit of the wells and identify the wells that can be revived and put back to production.
It will devise a strategy for the revival of already identified shut-in wells. Meanwhile, it will come up with recommendations in case of non-compliance or non-implementation of a work plan for penalising as per the law.
The government has also assigned the team the task of identifying any additional wells that can be put to production shortly. The team will monitor the wells already in production in relation to quality control, assessment of production facilities, technical losses/ theft assessment, daily production data and drilling data.
The team will compile a detailed report and submit it within a month. Through this initiative, the government is keen to boost oil and gas exploration activities in the country.
Published in The Express Tribune, November 12th, 2020.
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