E&P firms to invest $33m for oil, gas search
Exploration and production (E&P) companies are poised to invest $33.3 million over the next three years in eight blocks to search for hydrocarbon reserves in an attempt to overcome the energy crisis in the country.
These companies on Wednesday inked petroleum concession agreements (PCAs) with the government and got exploration licences.
The exploration blocks awarded to Oil and Gas Development Company (OGDC) were Kotra East (2,867-8), Murradi (2,767-7), Sehwan (2,667-19) and Zindan-II (3,271-9).
Pakistan Oilfields Limited (POL) got Multanai (3,168-3) block while Sawan South (2,668-26) went to United Energy Pakistan Limited (UEP) – a Chinese E&P company.
Gambat-II (2,668-25) block was given to a joint venture of Pakistan Petroleum Limited (PPL – the operator) and OGDC while Saruna West (2,666-1) was awarded to the joint venture of POL (the operator), PPL and OGDC.
PCAs and the exploration licences were signed by Petroleum Division Secretary Momin Agha, Director General Petroleum Concession Kashif Ali, OGDC Managing Director Ahmed Hayat Lak, POL Chairman and CEO Shuaib A Malik, PPL Chief Operating Officer Sikandar Ali Memon and UEP Head of Exploration Dr Nadeem Ahmed.
Speaking at the ceremony, Minister for Power and Petroleum Muhammad Ali stated that such efforts would bear fruit in the form of additional hydrocarbon reserves for consumption in the country in the next few years.
Read E&P firms give poor response
He emphasised that the exploration licences and PCAs would not only enhance investment in the petroleum sector but would also contribute to bridging the gap between energy demand and supply.
The minimum investment to be made by the E&P companies in the awarded blocks for finding hydrocarbon deposits would be over $33.3 million in three years.
For blocks where discoveries are made, investments of several hundred million dollars will be made to extract oil and gas. Moreover, these companies are required to spend a minimum of $30,000 per year in each block on social welfare schemes in their respective areas.
Earlier, the Petroleum Division floated bids for the auction of 10 blocks but no foreign company turned up to make offers. Pakistani companies, mainly state-owned, took part and offered bids for six blocks.
A bid opening committee, headed by the director general of petroleum concession, publicly unveiled bids on November 30, 2023 for 10 onshore blocks for granting petroleum exploration rights.
The poor response is nothing less than a setback at a time when the government is working hard to woo foreign investors. Almost all foreign energy companies have quit Pakistan because of policy inconsistencies, corruption cases and bureaucratic hurdles.
Over the past decade, Pakistan has mainly relied on gas imports due to the depletion of its reserves at a pace of around 6% per year.
Published in The Express Tribune, January 25th, 2024.
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