Pakistan has found oil on its soil. However the oilfields have been small and did not bring windfall profits like the fields brought to the Middle Eastern Arab states.
July 13 (Bloomberg) — Pakistan’s government is targeting $15 billion in investment to develop its oil and gas industry over the next five years as explorers including Eni SpA drill in offshore fields, an official said.
The majority of the investment in rigs and equipment will be directed off the country’s southern coast, said Asim Hussain, adviser to the prime minister on the oil industry. That compares with $1 billion expected this year, he said.
“Pakistan offers lucrative returns,” Hussain said in an interview in the capital, Islamabad. “We want petroleum companies to invest in our petroleum sector and explore the untapped fields.”
Oil exploration in Pakistan started before the 2nd World war. One of the smallest oil companies in the world found an oil field in Morgah Rawalpindi. The British drilled oil rigs a few meters apart–so many rigs that the gas escaped leaving the oil underground.
Developing offshore fields reduces the risk of attacks by militants that have hampered oil and gas exploration, increasing Pakistan’s reliance on imported fuels. U.K. explorer Tullow Oil Plc stopped operating in the northwest tribal region in March where the Pakistan military is fighting Taliban insurgents.
“The target looks ambitious when viewed in perspective of investment in past years and security, which hasn’t improved,” said Muhammad Azfer Naseem, an energy analyst at Invisor Securities Ltd. in Karachi. “Companies will be concerned about security for onshore drilling, particularly in the country’s north.”
Pakistan needs to boost oil and natural gas production as the government battles extremist violence and its worst economic crisis in a decade. The Pakistan Peoples Party-led coalition government’s bid to revive the economy has been hurt by Taliban militancy in the northwest that has killed thousands of people. Bloomberg
Pakistan Oilfields and Attock Oil Company (the smallest Oil company in the world) also found oil in Khaur, Dhulian, and Balkasar. The oil found was called “sweet oil”. Sweet Oil is of very high quality and is considered high octane, high grade fuel. Libyan crude is of the same grade.
Pakistan also formed the Oil and Gas Development Corporation (OGDC) which found gas in Sui in Baluchistan. It also found oil in Sindh. Occident and other oil companies also found oil, but none of the fields contained vast quantities of the black gold.
Offshore Licenses
The Petroleum Ministry has issued 14 offshore exploration licenses to companies including BP Plc, Europe’s second-biggest explorer, and Pakistan’s Oil & Gas Development, said G.A. Sabri, special secretary petroleum, in the same interview. Eni, Italy’s largest petroleum company, plans to explore in two blocks off the coast in the year started July 1, he said.
Offshore drilling hasn’t been successful in Pakistan, Naseem said.
Pakistan wants to boost domestic fuel production to reduce its oil import bill and meet energy demand, which is growing 5 percent annually. Gas production of 4.1 billion cubic feet a day meets about 60 percent of demand.
The government will try to improve security for explorers as it also seeks to attract investment in new fields in the country, 55-year-old Hussain, who is also a medical doctor, said in the interview on July 10.
Pakistan will offer 52 onshore areas for exploration this year, he said. The government plans meetings with potential bidders in London on July 23 and 24, in Houston on July 27 and 28 and in Calgary on July 30 and 31, Hussain said. Chief executive officers of exploration companies will be invited to bid for the areas being offered, he said.
Pakistan today meets about 18% of its needs. The rest is imported. Seismic studies show that there is shale under the oceans which belong to the Pakistani shoreline. However offshore oil is hard and expnsive to dig for. Oil companies off the shore of Pakistan have been unlucky. They know there is oil, so they keep coming back.
Right now there are many companies that want to dig for oil in the Pakistani oceans.
Selling Interest
London-based Tullow, which entered Pakistan in 1991, agreed in December to sell its interest in the Chachar field in Punjab province to Pakistan Petroleum Ltd.
The company, which operated the Kohat exploration block in the North West Frontier Province, said in March it transferred that responsibility to Oil & Gas Development Co., Pakistan’s national oil company.
Pakistan imports 82 percent of its oil needs to meet demand in an economy that the government estimates will grow more than 6 percent annually for five years.
The country received an average investment of $1 billion annually in its oil industry in the past five years, according to Naseem.
Last year, Pakistan turned to the International Monetary Fund for a $7.6 billion loan to revive the economy and boost foreign currency reserves.
Pakistan’s economy grew 2 percent last fiscal year ended June 30, the slowest in eight years, from an annual 6.8 percent in the past five years. The government is targeting growth of 3.3 percent this year.
To contact the reporters on this story: Khalid Qayum in Islamabad at kqayum@bloomberg.net; Khaleeq Ahmed in Islamabad at paknews@bloomberg.net. Pakistan Targets $15 Billion Five-Year Investment in Gas, Oil By Khalid Qayum and Khaleeq Ahmed
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