Pakistan Among Top 5 Countries to Discover Oil and Gas in 2017

Pakistan made two key oil and gas discoveries in the third quarter and another three discoveries in the fourth quarter of 2017. These discoveries may have prompted the US-based Exxon-Mobil to join off-shore drilling efforts in Pakistan. American energy giant's entry in Pakistan brings advanced deep sea drilling technology, its long experience in offshore exploration and production and its deep pockets to the country. US Energy Information Administration (EIA) estimates that Pakistan has technically recoverable deposits of 105 trillion cubic feet (TCF) of gas and 9.1 billion barrels of oil. Exxon-Mobil is expected to accelerate exploration and lead to more discoveries and increased domestic oil and gas production.

Top Countries Discovering Oil and Gas:

Russia led with 10 discoveries, followed by Australia with seven discoveries and Colombia with four discoveries. Pakistan and the UK each had three discoveries in the fourth quarter of 2017, according to Global Oil and Gas Discoveries Review.

Oil and Gas Discoveries 2H/17. Source: Offshore Technology

In fourth quarter of 2017, the Former Soviet Union leads with 12 discoveries, followed by Asia with eight discoveries, and Oceania with seven discoveries. Europe and South America had five discoveries each, followed by North America with two discoveries, while the Middle East and Africa had one discovery each in the quarter, according to Offshore Technology website.

Top 3 Offshore Drilling Sites in Asia-Pacific. Source: Bloomberg

Exxon-Mobil's Entry in Pakistan:

American energy giant Exxon-Mobil has joined the offshore oil and gas exploration efforts started by Oil and Gas Development Corporation (OGDC), Pakistan Petroleum Limited (PPL) and Italian energy giant ENI, according to media reports.

Each company will have 25% stake in the joint venture under an agreement signed at the Prime Minister’s Secretariat in May among ExxonMobil, Government Holdings Private Limited (GHPL), PPL, ENI and OGDC.

Exxon-Mobile's entry in Pakistan brings deep offshore drilling technology, its long experience and financial resources to the country. It is expected to accelerate exploration and more discoveries.

Pakistan Oil Basins:

A Pakistan Basin Study conducted in 2009 found that the country has six onshore and two offshore basins; offshore basins being the Indus basin and the Makran basin in the Arabian Sea.

The Indus offshore basin is a rift basin that geologists say developed after the separation of the Indian Plate from Africa in the late Jurassic period. It is believed to be the second largest submarine fan system in the world after the Bay of Bengal with high probability of hydrocarbon discoveries.

The Makran Offshore basin is separated from the Indus Offshore basin by Murray ridge, according to Syed Mustafa Amjad's report in Dawn. It is an oceanic and continental crust subduction zone with deepwater trenches and volcanic activity. The basin consists of oceanic crust and periodic emergence of temporary mud islands along the coast suggesting strong evidence of large hydrocarbon deposits.

Pakistan Hydrocarbon Potential:

The United States Energy Information Administration (EIA) estimates that Pakistan has 586 TCF (trillion cubic feet) of gas in Pakistan of which 105 TCF is technically recoverable.

In addition to gas deposits, US EIA estimates there are 227 billion barrels of oil in Pakistan with 9.1 billion barrels being technically recoverable.

Pakistan also has 185 billion tons of coal deposits in Thar desert which are just beginning to be extracted by Sindh Engro Coal Mining Corporation.

Oil and Gas exploration and production companies are currently planning to drill 90 wells in different parts of  the country. Under the plan, as many as 50 exploratory and 40 development wells would be drilled in a bid to make the country self-sufficient in the energy sector, according to media reports.

During the last five years, the sources said the exploration and production companies drilled 445 new wells, out of which 221 were exploratory, adding that the increased exploration activities resulted in 116 new oil and gas discoveries.

Current Account Deficits:

Energy imports make up a big chunk of Pakistan's total imports. Rising oil prices worsen the current account deficit and put pressure on Pakistan's reserves, forcing the country to seek periodic IMF bailouts.

Pakistan’s current account deficit has jumped by 50% to a record high of $14.03 billion in the first 10 months of the current fiscal year 2018, according to the State Bank of Pakistan.  The country imported $12 billion worth of energy in 2017. The bill is likely to grow with increasing demand and rising prices in 2018.

Reducing energy imports by increasing domestic production will likely ease Pakistan's current account deficits and reduce its chances of going back to the IMF again and again.

Summary:

Pakistan made 2 key oil and gas discoveries in 3rd quarter and another 3 discoveries in the 4th quarter of 2017. These discoveries appear to have prompted US-based Exxon-Mobil to join off-shore drilling efforts in Pakistan.  American energy giant's entry in Pakistan brings advanced deep sea drilling technology, its long experience in offshore exploration and financial resources to the country. It is expected to accelerate exploration and lead to more discoveries.  US Energy Information Administration (EIA) estimates that Pakistan has technically recoverable deposits of 105 trillion cubic feet (TCF) of gas and 9.1 billion barrels of oil. Reducing energy imports by increasing domestic production will likely ease Pakistan's current account deficits and reduce its need to seek repeated IMF bailouts.

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Comment by Riaz Haq on September 9, 2020 at 4:43pm

A good-sized gas discovery in #Kalat, #Balochistan . #Pakistan Petroleum Ltd MD says initial estimates show gas volume is close to one trillion | The Express Tribune


https://tribune.com.pk/story/2263143/a-good-sized-gas-discovery-in-...



The hefty energy imports cost the country an approximate $15-16 billion annually, which puts great pressure on the foreign exchange reserves.

But the days of burning precious foreign exchange to fuel wheels of economy may have come to an end with this latest discovery.

In an interview, PPL Managing Director Moin Raza Khan told The Express Tribune, “Last year in December, we made a good-sized discovery in the Kalat Plateau in the deeper part of Balochistan. Our gas column is huge, slight less than 1km.”

As per initial estimates, the size of gas reserves is around one trillion cubic feet.

Explaining what constitutes a good discovery, Arif Habib Limited (AHL) Head of Research Tahir Abbas told The Express Tribune, “Our local gas production is around 3.7 bcf; so any discovery with a size of 10% of our total annual production [or more] would be a slightly big discovery.”

“When we drill more appraisal wells, we can give an exact figure but based on the map that we have prepared and based on the column of gas that has come, the volume is close to one trillion cubic feet,” the PPL MD added.

Sharing details, he said that the column had around 55% of hydrocarbons and though they would have to set up a lot of plants, he was of the view that “this discovery has opened a new petroleum play in the country”.

“We are going to drill another well soon, probably in the next six or seven months. But because of the location of the field, it is difficult to develop it at the pace we would have desired.”

Raza said that this was not just a single discovery but there were many other structures as well. “The hydrocarbon habitat has been confirmed,” he said, adding that once the gas discovery was made, chances of success increased.

“PPL’s Margand findings are a landmark discovery. There will be a string of discoveries after this in this region.”

Slowdown in discoveries

Pakistan’s gas production has stagnated at around four billion cubic feet per day (bcfd) against an unconstrained demand for over 6 bcfd. To meet the shortfall, the government initiated LNG imports.

Natural gas is the country’s main source of fuel, accounting for most of the energy consumption but most of it still remains untapped. In fact, over the years gas production has been declining due to insufficient investment and regulatory challenges.

“In Pakistan, so far we have discovered gas equivalent to 10.8 billion barrels of oil and in case of oil we have discovered around 1.5 billion barrels,” said Raza.

Sharing the current situation, the AHL head of research said that Pakistan’s gas reserves as of December 2019 stood at 20,884 bcf, which means “we have just 16 years of gas reserves available”.

Abbas said that since “we have not had any major discovery in the past 15 to 20 years, there has been a slowdown in gas production”. Tal block was the last major discovery in 2002, he added.

“We have a significantly lower reserves replacement ratio because we have not made any major discovery in the past 15 to 20 years.”

Echoing similar remarks, Raza said that over the years many discoveries have been made, such as Uch, Mari, Kandhkot and Adhi to name a few, and are still being made but the size of those discoveries is decreasing.

After the discovery of Sui gas field, exploration activities kicked off in full swing and from 1952 to 1960, 4.9 billion barrels of oil equivalent gas had been discovered, he added.

“So, about 45% of the gas discovered in Pakistan was already found within 10 years after the Sui discovery.”

After 1960, the curve somewhat flattened but further exploration activities started and “we kept adding to the overall reserves”.

Comment by Riaz Haq on August 31, 2021 at 5:00pm

Pakistan Invests in #MiddleEast #Oil in $305 Million #UAE Deal. A group led by state-owned #Pakistan Petroleum Ltd. will invest about $305 million to find crude and natural gas in the UAE’s Persian Gulf waters, according to #AbuDhabi National Oil Co. https://www.bloomberg.com/news/articles/2021-08-31/pakistan-invests...

The United Arab Emirates awarded an oil concession to companies from Pakistan for the first time.

A group led by state-owned Pakistan Petroleum Ltd. will invest about $305 million to find crude and natural gas in the UAE’s Persian Gulf waters, according to Abu Dhabi National Oil Co.

Comment by Riaz Haq on September 28, 2021 at 7:42am

OGDC Confirms #Hydrocarbons Presence at Deeper Formation of Wali Block in #KP #Pakistan. It said the 3rd prospective zone, Lockhart Limestone, has been tested at a rate of 13.7 million standard cubic feet of #gas & 1,010 barrels of condensate #oil per day https://www.marketwatch.com/story/ogdc-confirms-hydrocarbons-presen...

Oil & Gas Development Co. said Tuesday that its Wali-1 exploration well confirmed the presence of hydrocarbons at the deeper reservoirs of its Wali block in Pakistan.

The Pakistani energy company said the third prospective zone, Lockhart Limestone, has been tested at a rate of 13.7 million standard cubic feet of gas and 1,010 barrels of condensate per day.

"This confirmation of presence of hydrocarbon in the deeper reservoirs has further extended the hydrocarbon play area on the south western part of Bannu Basin and de-risked the exploration," OGDC said.

Write to Jaime Llinares Taboada at jaime.llinares@wsj.com; @JaimeLlinaresT

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