 |
| Top 3 Offshore Drilling Sites in Asia-Pacific. Source: Bloomberg |
Why is it taking so long to get confirmation from the companies involved? What are the technical issues in getting confirmation of these huge reserves? Why is there such a big concern about blow-out? Is it because the 1.5 billion barrels pre-drill estimate of Kekra-1 well in block G of the Indus basin off the Karachi coast? Could such a large reserve cause a major blow-out accident like the one British Petroleum had in Gulf of Mexico near Louisiana in the United States? How long will it take to fix the blow-out preventer (BOP) and complete drilling of the remaining 600-800 meters of the total depth of over 5,500 meters deep in the Arabian Sea?
 |
| Offshore Blowout Preventer Stack. Courtesy: British Petroleum |
Azad Labon Kay Sath host Faraz Darvesh discusses these questions with Misbah Azam and Riaz Haq (www.riazhaq.com)
https://youtu.be/02oKLNPmUdk
Related Links:
Haq's Musings
South Asia Investor Review
Pakistan's Insatiable Appetite For Energy
US EIA Estimates of Oil and Gas in Pakistan
Pakistan's Debt Crisis
Can Pakistan Avoid Recurring IMF Bailouts?
Pakistan is the 3rd Fastest Growing Trillion Dollar Economy
CPEC Financing: Is China Ripping Off Pakistan?
Information Tech Jobs Moving From India to Pakistan
Thar Coal Development
Why Blackouts and Bailouts in Energy-Rich Pakistan?
Riaz Haq's Youtube Channel
23 comments:
Its not Oil discovery its most likely gas. 500 million BOE of gas. Its not barrels but Barrel oil equivalent. 500 million barrel equivalent to 2.9 TCF of gas. Sui for example has / had 2 TCF of gas. Its your next Sui and a bit more. It is no where near to say Iran's smaller gas fields.
http://www.kylesconverter.com/energy,-work,-and-heat/cubic-feet-of-natural-gas-to-barrels-of-oil-equivalent
Haven't we heard these fairy tales growing up in Pakistan? First it was Sui gas with enough supplies for 400 years. then it was petroleum in Balochistan. The Iranians were stopping the oil from flowing.
Blah, blah, blah. One of my relatives worked for Attock oil; he just posted in Face book and said he got production increased form 55 to 125 barrels per day. Good for him but in reality its nothing.
Personally until oil starts flowing, I would not get my hopes up. And when it does how does Pakistan and the poor man benefit?
The rich and powerful will figure it out anyway.
Good post.
How large is the oil field?
Total volume: 1.5 Billion bbl.
Pak annual demand: 200 Million bbl
It comes at 7.5 years supply. Not much.
Also, the oil will do no good if national ethics stay the same. Somebody will just take it. Then you would see few more Towers in Dubai owned by ....
Or the Subsidy to Sugar Mafia may be increased. Our current govt. tried to refuse giving subsidy to Sugar Mafia, but to no avail. Jahangir Tareen, Asif Zardari, abd The Sharif’s are just too powerful a lobby. They got their subsidy.
Rashid: "Total volume: 1.5 Billion bbl. Pak annual demand: 200 Million bbl. It comes at 7.5 years supply. Not much."
The pre-drill estimate of 1.5 billion barrels is for just one well Kekra-1 in one block- Block G- of Indus basin. The overall estimate for Pakistan by US Energy Admin exceeds 10 billion barrels in two offshore basins: Indus and Makran
Please watch the video.
https://youtu.be/02oKLNPmUdk
Pakistan oil and gas discovery: PM Imran raises hopes with new statement
https://www.thenews.com.pk/latest/466040-pakistan-oil-and-gas-discovery-pm-imran-raises-hopes-with-new-statement
ISLAMABAD: Prime Minister Imran Khan has once again raised hopes that Pakistan can hit major oil and gas reserves in offshore drilling.
Speaking at the PTI's 23rd foundation day ceremony, the prime minister talked about the alleged corruption of the PPP and PML-N which he said has brought the country's economy to its current state.
While he vowed to correct the course, the premier said the PTI government would offer no NRO to the opposition parties.
During his speech, the prime minister said the country was blessed with everything that is considered vital to put any country on the path to prosperity.
Apart from sharing his future plan to uplift the economy, he said he was still hopeful that Pakistan would discover major gas reserves in offshore drilling being carried out in the Arabian Sea.
He said the nation could receive a good news within two weeks. The prime minister asked the nation to offer special prayers so that the expectations attached to the drilling project come true.
Imran Khan said, if found, the gas reserves would be enough to meet Pakistan's needs for the next 50 years.
#Exxon to report Kekra-I #oil #gas drilling results within 3-4 weeks, #Pakistan Senate told. A major drilling ship “Mother of All Rigs” along with three supply vessels is drilling offshore at the site 280 kilometers off the #Karachi coast.
https://www.pakistantoday.com.pk/2019/05/03/report-on-kekra-i-drilling-within-3-4-weeks-senate-told/#.XMzJx92qt_I.twitter
Federal Minister for Energy Omar Ayub Khan on Friday said that the report on any discovery of energy reserves at Kekra-I offshore drilling site will come within three to four weeks.
Speaking during the question hour in Senate, Ayub said that the offshore drilling for oil and gas has been underway at Kekra-I site near Karachi.
Replying a question the minister said the drilling has currently reached to 4,800 meters and the well will be drilled up to the total depth of 5,660 meters in ultra-deep waters.
It is to mention here that a delegation of Exxon Mobil informed Omar Ayub Khan in a recent meeting that the company was hopeful of finding energy resources at Kekra-I site.
The delegation was headed by Alex Volkov, chairman of LNG Market Development Exxon Mobil.
Exxon Mobil President Irtiza Syed briefed the minister about the status of offshore drilling at Kekra-I that started in January 2019. He added that Exxon Mobil is also interested in the drilling of more offshore blocks.
Drilling has now entered in its final phase where it will be easy to ascertain the presence of oil or gas deposits.
Recently international energy research agency Rystad Energy in a report said that the Eni-led Kekra project for oil and gas reserves in Pakistani waters is among three highly prospective wells in the world.
The research agency in its report on the prospective new discoveries of energy resources said that Kekra well in Pakistan has pre-drill prospective resource estimates of 1.5 billion barrels of oil or equivalent.
A group of multinational companies had started offshore drilling in January for exploration of oil and gas.
A major drilling ship, “Mother of All Rigs” along with three supply vessels started the drilling at the site.
The companies are drilling Kekra-1 well in Indus-G block, which is located some 280 kilometres away from the Karachi coast.
Any estimates on cost of production per boe? Offshore development is very expensive. How would this cost of production compare with the cost of shale reserves, which are large enough by themselves.
The average cost for offshore rigs can be as much as 15 to 20 times greater than the average cost for land rigs. The least-expensive offshore rigs typically cost nearly $200 million. The average price for offshore oil-drilling rigs is approximately $650 million. Following the oil crisis that began in 2014, offshore rig firms believed that a recovery on the rig rental market would take place in 2018 due to increased demand, with average prices projected to rise above their current value of $200,000 per day.
Drilling Companies will offer a royalty based contract or cost based contract or a combination of both. The deeper the well, higher the initial cost and greater but constant maintenance costs. I would estimate $60 per barrel will be the break even point for Pakistan after costs and royalty charges. Shipping is additional and dependent on distance and or pipeline infrastructure.
Sarkar: "I would estimate $60 per barrel will be the break even point for Pakistan after costs and royalty charges"
If the cost of extraction offshore in Pakistan waters was really $60, no company, much less ExxonMobil, would drill there given that the price per barrel on world market is around $60. Dutch Shell says average for offshore is $30 a barrel. It's lower for larger finds because the initial cost is spread over more barrels of oil extracted. In Pakistan's case, we're talking about estimated 1.5 billion barrels at Kekra-1 well.
Read the following:
https://oilprice.com/Energy/Energy-General/Is-Deepwater-Drilling-More-Profitable-Than-Shale.html
"The reason why deepwater drilling is so exciting to Shell is that the cost of new projects has fallen significantly in recent years. “Deepwater can compete if not demonstrate higher returns because of fundamental cost reduction,” Brown said. “Break-even prices in deepwater — we are now talking $30 per barrel.”
That compares favorably to a lot of onshore shale plays, and in fact, it would beat out just about everywhere that shale companies are drilling. For instance, the SCOOP in Oklahoma has a breakeven price in the mid-$60s per barrel, according to data from Bloomberg New Energy Finance from earlier this year. That is on the upper end, but even more competitive areas are much costlier than the figures that Shell is citing. The Eagle Ford breaks even at between $48 and $61 per barrel, the Bakken at $53 to $56, the Niobrara at $63 and the Delaware basin (Permian) at $57 per barrel. Even the Midland Permian, arguably the most prized shale region in the country, breaks even at about $37 per barrel, BNEF says."
Drilling resumes for #oil #gas at Kekra-1 well (pre-drill est 1.5 billion barrels) offshore from #Karachi in #Pakistan. Now at 5,148 meters depth with 312 m still left to be spudded to reach almost 5,500 meters for final confirmation of massive reserves. https://www.thenews.com.pk/print/467995-final-phase-of-drilling-at-kekra-1-continues
ISLAMABAD: At last the drilling at Kekra-1 well in G-bloc, Pakistan’s ultra-deep sea has begun after a long pause of over almost 23 days and entered the final phase by reaching the depth of 5,148 meters and will reach at the required depth of 5,460 meters within days, a senior official told The News.
The joint venture headed by ENI is operator comprising Exxon Mobile, OGDCL and PPL started the drilling on January 13, 2019 at the cost of sunk money of $75 million, which has increased to $90 million so far.
When the drilling reaches the depth of 5,460 meters, the official said, the operator will likely do wire line logging which could take another three or four days. This will likely be followed by another casing and cementing exercise that can take four to six days. At this stage a substantial amount of information regarding the well prospects will be known, however, the results (discovery or dry well) will require completion of proper testing.
Spokesman for the Petroleum Division Additional Secretary Sher Afgan confirmed that the drilling has entered the final phase and reached the depth of 5,148 meters and only 312 meter is left to be spudded as it has to reach almost 5,500 meters. He said after reaching the required depth the operator will get the specimen that will be sent to Italy for information if there is a reservoir of oil and gas in the well or not.
The last snag hit the drilling when the blowout preventer (BOP) that prevents from any blow out or any kick pressure that can result into eruption of fire, had gone out of order and its repair took some days and then its testing took the reasonable time. Before it, the drilling stopped on April 8 because of the cementation and casing continued owing to which the drilling could not start.
So far the drilling witnessed many upheavals starting from January 2019 up till now and it has got delayed by one month as it was earlier scheduled to get completed by April end which is now rescheduled up to the middle of May at the maximum.
The drilling was initiated with 19 percent probabilities, which, according to the experts, get reduced when side tracking starts taking place. In Kekra-1 well case, second side tracking was underway. Officials said when side tracking process is initiated, this means that first plan of drilling was not well worked out.
Earlier when at Kekra well vertical drilling reached at depth of 4,799 meters on February 21, a high pressure was felt causing huge mud loss and because of unsafe operation the well was plugged by March 23. Then the first side tracking started and when it reached down to 3,100 meters, it again met failure, which is why the hole was also blocked. After that the second side tracking began which is still underway and may reach at the required depth within days.
Drilling resumes for #oil #gas at Kekra-1 well (pre-drill est 1.5 billion barrels) offshore from #Karachi in #Pakistan. Now at 5,148 meters depth with 312 m still left to be spudded to reach almost 5,500 meters for final confirmation of massive reserves. https://www.thenews.com.pk/print/467995-final-phase-of-drilling-at-kekra-1-continues
ISLAMABAD: At last the drilling at Kekra-1 well in G-bloc, Pakistan’s ultra-deep sea has begun after a long pause of over almost 23 days and entered the final phase by reaching the depth of 5,148 meters and will reach at the required depth of 5,460 meters within days, a senior official told The News.
The joint venture headed by ENI is operator comprising Exxon Mobile, OGDCL and PPL started the drilling on January 13, 2019 at the cost of sunk money of $75 million, which has increased to $90 million so far.
When the drilling reaches the depth of 5,460 meters, the official said, the operator will likely do wire line logging which could take another three or four days. This will likely be followed by another casing and cementing exercise that can take four to six days. At this stage a substantial amount of information regarding the well prospects will be known, however, the results (discovery or dry well) will require completion of proper testing.
Spokesman for the Petroleum Division Additional Secretary Sher Afgan confirmed that the drilling has entered the final phase and reached the depth of 5,148 meters and only 312 meter is left to be spudded as it has to reach almost 5,500 meters. He said after reaching the required depth the operator will get the specimen that will be sent to Italy for information if there is a reservoir of oil and gas in the well or not.
The last snag hit the drilling when the blowout preventer (BOP) that prevents from any blow out or any kick pressure that can result into eruption of fire, had gone out of order and its repair took some days and then its testing took the reasonable time. Before it, the drilling stopped on April 8 because of the cementation and casing continued owing to which the drilling could not start.
So far the drilling witnessed many upheavals starting from January 2019 up till now and it has got delayed by one month as it was earlier scheduled to get completed by April end which is now rescheduled up to the middle of May at the maximum.
The drilling was initiated with 19 percent probabilities, which, according to the experts, get reduced when side tracking starts taking place. In Kekra-1 well case, second side tracking was underway. Officials said when side tracking process is initiated, this means that first plan of drilling was not well worked out.
Earlier when at Kekra well vertical drilling reached at depth of 4,799 meters on February 21, a high pressure was felt causing huge mud loss and because of unsafe operation the well was plugged by March 23. Then the first side tracking started and when it reached down to 3,100 meters, it again met failure, which is why the hole was also blocked. After that the second side tracking began which is still underway and may reach at the required depth within days.
Please also highlight in separate article the potential for Pakistan's geothermal power generation / cooling or heating. One estimate is 30,000 MWe . However significant work needs to be done.
References:
1. http://pubs.geothermal-library.org/lib/grc/1033590.pdf
2. www.indjst.org/index.php/indjst/article/download/131158/97211
3, https://dbdh.dk/download/member_area/.../Geotermisk%20Middle_East_Update.pdf
4. orkustofnun.is/gogn/Skyrslur/ISOR-2016/ISOR-2016-008.pdf
#ExxonMobil, #ENI complete offshore drilling 280 km off #Karachi coast in #Pakistan. Initial tests indicate availability of around 9 trillion cubic feet of #gas with a large quantity of #oil in the Kekra-1 well- Xinhua | English.news.cn http://www.xinhuanet.com/english/2019-05/14/c_138058229.htm#0-twi-1-43110-7250227817ecdff034dc9540e6c76667
A consortium of four major oil exploration companies has completed the offshore drilling process near the southern port city of Karachi in Pakistan after a hard work of four months.
According to the local media reports on Tuesday, ExxonMobil, ENI, Oil and Gas Development Company, and Pakistan Petroleum Limited are conducting the drill stem test to determine the real size of the oil and gas reserves in the Kekra-1 well, located around 280 km away from Karachi.
The joint venture of four oil giants spudded the Kekra-1 well to the depth of 5,470 m at a cost of 14 billion Pakistani rupees.
According to the officials in the Ministry of Petroleum, the Drill Stem Test would be completed in the next three days. After the completion of the Drill Stem Test, a report will be prepared about the total quantity of the oil and gas reserves within a week.
They further stated that the initial tests had estimated the availability of around 9 trillion cubic feet of gas with a large quantity of oil in the Kekra-1 well, which had excited the nation, including Prime Minister Imran Khan who openly spoke about it on numerous occasions.
The four-firm joint venture had started the offshore drilling process on Jan. 11, 2019, which was expected to be completed by March. However, the process was delayed by critical issues, but ENI stayed committed to the completion of the offshore drilling.
The technical problems during the offshore drilling forced the drilling team to spend an additional 100 million U.S. dollars to procure surplus steel and cement because the team had to change the direction of the drilling process of the Kekra-1 well.
The Petroleum Ministry officials informed the local media that changing the direction of the drilling was a challenging task because the joint venture was running out of time to complete the drilling process as sea waves generally become unstable by the end of May. The stability of a drilling ship by the end of May would have been quite a daunting task, they added.
They informed that within the next 10 days, the joint venture team would be able to determine the actual size of the oil and gas discovery. According to senior officials of the Petroleum Ministry, the necessary infrastructure would be erected in the sea for oil and gas exploration only if the price of total reservoir quantity was worth more than 10 billion U.S. dollars.
The economic experts believe that if the four major oil exploration companies are able to find the reservoir quantity according to the estimates, it would cut down Pakistan's oil import bill by 6 billion U.S. dollars every year.
https://www.thenews.com.pk/latest/473016-kekra-1-well-in-deep-sea-no-reservoir-found-drilling-halted
Kekra-1 well in deep sea: Hopes fade as no oil, gas reservoir found; drilling halted
KARACHI: Special Assistant to Prime Minister Imran Khan on Petroleum Nadeem Babar has said that drilling at Kekra-1 well in deep sea near Karachi has been stopped after no oil or gas reservoir could be found.
MOL Discovers Significant #Oil-#Gas Reserves in #Pakistan. Mamikhel South-1 exploratory well in TAL Block achieved a flow rate of 6,516 barrels of oil a day.
This is the #Hungarian Co's 13th discovery in Pak, 10th discovery in TAL since 2000 https://www.rigzone.com/news/mol_discovers_significant_reserves_in_pakistan-14-jul-2020-162712-article/?utm_source=GLOBAL_ENG&utm_medium=SM_TW&utm_campaign=SHARE_DESKTOP via @rigzone
MOL revealed Tuesday that it has discovered “significant” gas and condensate reserves in Pakistan.
The Mamikhel South-1 exploratory well, which is located in Pakistan’s TAL Block, achieved a flow rate of 6,516 barrels of oil equivalent per day during testing, according to the company, which noted that further testing of the well is currently ongoing.
Mamikhel South-1 marks MOL’s 13th discovery in Pakistan and the 10th discovery in the TAL Block. MOL’s 13 oil, gas and condensate finds have all been made since the year 2000.
“I am delighted to announce that we have made another discovery in Pakistan,” Berislav Gaso, MOL Group’s exploration and production EVP, said in a company statement.
“This new discovery has de-risked an exploration play in deeper reservoir in the TAL Block, leading to new upside opportunities. The Mamikhel South-1 discovery will also help to improve the energy security of the country from indigenous resources,” he added.
“We are thankful to our Joint Venture partners as well as the Government of Pakistan for their continued support,” Gaso continued.
MOL is the operator of the TAL Block. The company is Pakistan’s second largest producer of LPG, crude oil and condensate and currently addresses around nine percent of the natural gas needs, 25 percent of the oil and condensate needs and 22 percent of the LPG needs of Pakistan, according to its website.
Back in March this year, MOL announced that it had discovered oil and gas in an offshore field located about 120 miles west of Stavanger in the Norwegian part of the North Sea. The potential resources discovered in the main formation of the asset were said to be between 12 and 71 million barrels of oil and gas equivalent.
MOL describes itself as an integrated, international oil and gas company. The business is headquartered in Budapest, Hungary, but is active in over 40 countries.
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-in-middle-east-oil-with-305-million-uae-deal
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.
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-presence-at-deeper-formation-of-wali-block-in-pakistan-271632824107?reflink=mw_share_twitter
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
A significant deposit of petroleum and natural gas has been discovered in Pakistan's territorial waters, with estimates suggesting it could be the fourth-largest oil and gas reserve globally.
https://www.cnbctv18.com/world/pakistan-finds-oil-that-may-change-its-destiny-natural-gas-petroleum-19472606.htm
The discovery, verified through a three-year survey in collaboration with a friendly nation, holds the potential to dramatically alter Pakistan's economic fortunes, according to a senior security official quoted by DawnNewsTV.
The extensive geographic survey has pinpointed the location of the deposits, with relevant departments informing the government. The survey marks the beginning of what officials are calling an initiative to benefit from the ‘blue water economy’, which includes not only oil and gas but also other valuable minerals from the ocean.
Proposals for exploration and bidding are under review, but actual extraction may take several years. The process of digging wells and extracting the oil and gas could be a long-term endeavour, requiring further investments and infrastructure development.
Challenges ahead
Former Oil and Gas Regulatory Authority (Ogra) member Muhammad Arif struck a more cautious note, reminding stakeholders that while optimistic, there is never a guarantee the reserves will meet expectations.
He explained that exploration requires a substantial investment of around $5 billion, and extracting the reserves could take up to five years.
The Chinese side expressed its willingness to strengthen cooperation with Pakistan in such areas as offshore oil and gas resources, and natural gas hydrate. The Chinese side would encourage Chinese companies to actively participate in the development of offshore oil and gas blocks of Pakistan.
http://losangeles.china-consulate.gov.cn/eng/topnews/202406/t20240609_11415903.htm#:~:text=The%20Chinese%20side%20expressed%20its,and%20gas%20blocks%20of%20Pakistan.
Joint Statement between the People’s Republic of China and the Islamic Republic of Pakistan
2024-06-09 10:43
June 7, 2024, Beijing
1.At the invitation of H.E. Li Qiang, Premier of the State Council of the People’s Republic of China, H.E. Muhammad Shehbaz Sharif, Prime Minister of the Islamic Republic of Pakistan paid an official visit to China from June 4 to June 8, 2024.
2.During the visit, H.E. Xi Jinping, President of the People’s Republic of China met with Prime Minister Sharif. Prime Minister Sharif held talks with Premier Li Qiang of the State Council, and met with H.E. Zhao Leji, Chairman of the Standing Committee of the National People’s Congress. The two sides had candid and in-depth exchanges of views on the entire spectrum of bilateral relations as well as regional situation and international landscape and reached extensive consensus on further strengthening the China-Pakistan All-Weather Strategic Cooperative Partnership and promoting practical cooperation in various areas, and on international and regional issues of mutual interest.
3.The two sides agreed that China and Pakistan are All-Weather Strategic Cooperative Partners and ironclad friends, and the two countries have always understood, trusted and supported each other. Since the establishment of diplomatic ties 73 years ago, China-Pakistan relations have stood the test of changing international environment and have been as solid as a rock, and as unshakable as a mountain. The Chinese side reiterated that the China-Pakistan relationship is a priority in its foreign relations. The Pakistani side underscored that the Pakistan-China relationship is the cornerstone of its foreign policy. The two sides enjoy unbreakable strategic mutual trust, fruitful practical cooperation in various fields, and maintain close coordination on international and regional affairs. The two sides would continue to view the relationship between China and Pakistan from a strategic height and a long-term perspective, take effective measures to safeguard the common interests of China and Pakistan, promote socio-economic development and well-being of the two peoples, work together to jointly uphold regional peace, stability, development and prosperity, and accelerate the building of an even closer China-Pakistan Community with a Shared Future in the New Era.
4.The Chinese side congratulated Pakistan on holding successful general elections, and expressed best wishes for the new Pakistani government in leading the Pakistani people in their endeavors to achieve socio-economic development, prosperity, unity, stability and security. The two sides will explore avenues to deepen experience-sharing in state governance and synergize their development strategies.
5.The Pakistani side spoke highly of China's major development achievements in the New Era, and expressed good wishes to the Chinese people that under the strong leadership of the Communist Party of China, China will realize the second centenary goal of building China into a great modern socialist country in every dimension. The Pakistani side spoke highly of and supports China’s all-round efforts to advance the building of a strong country and achieve national rejuvenation through a Chinese path to modernization, believes that the Chinese path to modernization provides a new option and practical solution for developing countries to achieve independent development.
Pakistan’s oil reserves surge 26% as OGDC and MARI report significant upgrades
https://profit.pakistantoday.com.pk/2024/08/20/pakistans-oil-reserves-surge-26-as-ogdc-and-mari-report-significant-upgrades/
Substantial increases in oil reserves bolster the energy sector, with MARI's assets doubling and OGDC seeing major gains despite declines in other fields
Pakistan’s oil and gas sector has received a substantial boost, with the country’s total oil reserves increasing by 26% to 243 million barrels as of June 2024, according to the latest data released by the Pakistan Petroleum Information Service (PPIS).
According to IMS Research, this significant rise is largely driven by notable reserve upgrades in key energy companies, particularly Oil and Gas Development Company (OGDC) and Mari Petroleum Company Ltd (MARI).
OGDC and MARI lead the charge
OGDC reported a 64% increase in its oil reserves, driven by major upgrades in key assets like Kunar and Pasakhi/Pasakhi North, which saw their reserves rise to 10.6 million barrels and 15.15 million barrels, respectively. Despite these gains, OGDC experienced a 30% decline in the oil reserves of its Nashpa field and an 8% reduction in its overall gas reserves due to natural declines in mature fields.
Meanwhile, MARI’s oil reserves have doubled since December 2023, reaching 13.4 million barrels, bolstered by the addition of reserves from the Bannu West (Shewa) field and the Bolan East reserve upgrade. MARI also saw a significant 25% increase in its gas reserves, with the Mari Ghazij field’s reserves surging from 35 billion cubic feet (bcf) to 789 bcf.
Tal Block and PPL show mixed results
The Tal Block, which is crucial to Pakistan Oilfields Ltd (POL), experienced a 10% decline in both oil and gas reserves, attributed mainly to production. Despite these declines, the recent discovery of Razgir-1 is expected to offset some of the reductions, offering a potential uplift in the future.
Pakistan Petroleum Ltd (PPL), however, saw a 6% decrease in its oil reserves and a 4% drop in gas reserves, primarily due to ongoing production activities. The company has managed to stabilize its reserves position through timely workover jobs, which are designed to maximize the life of its existing fields.
The overall modest 2% increase in Pakistan’s gas reserves to 18.5 trillion cubic feet (tcf) is seen as a mixed outcome, given the declines in other major fields. The upgrades in oil reserves, however, particularly for listed exploration and production (E&P) companies like OGDC and MARI, suggest a positive outlook for the sector.
This update is particularly favorable for OGDC and MARI, both of which are poised to see enhanced revenue streams from their bolstered oil reserves. With MARI’s oil reserves now close to those of the Tal Block, the company is expected to further diversify its revenue, reducing its reliance on gas.
As Pakistan continues to navigate the challenges of energy production and reserves management, these developments provide a cautiously optimistic outlook for the country’s energy sector, especially for key players like OGDC and MARI.
Why No Major Oil Company Is Rushing To Drill Pakistan's Huge Oil Reserves | OilPrice.com
Pakistan has discovered potentially massive oil and gas reserves, but experts caution that exploitation will take years and significant investment.
Security concerns and high costs are deterring international oil companies from pursuing exploration in Pakistan, leaving China as the most likely partner for future development.
Despite the discovery, Pakistan continues to face an energy crisis, with Iran reportedly smuggling fuel into the country, further complicating the situation.
https://oilprice.com/Energy/Energy-General/Why-No-Major-Oil-Company-Is-Rushing-To-Drill-Pakistans-Huge-Oil-Reserves.html
A long exploration effort has led to the reportedly massive discovery of oil and gas reserves in Pakistan’s territorial waters, a cache so large that it is said it could change the economic trajectory of the beleaguered country. But no one is rushing to drill in Pakistan, and experts are concerned about jumping the gun.
According to DawnNewsTV, the three-year survey was undertaken to verify the presence of the oil and gas reserves. “If this is a gas reserve, it can replace LNG imports and if these are oil reserves, we can substitute imported oil,’’ former Ogra (Oil and Gas Regulatory Authority) member Muhammad Arif told DawnTv.
However, Arif has cautioned that it would take years before the country could be able to exploit its newfound fossil fuel resources, adding that exploration alone required a hefty investment of around $5 billion and it might take four to five years to extract reserves from an offshore location.
Pakistan covers 29% of gas, 85% of oil, 50% of liquefied petroleum gas (LPG), and 20% of coal requirements through imports, according to the Economic Times. Pakistan's total energy import bill in 2023 clocked in at $17.5 billion, a figure projected to rise to $31 billion in seven years, as per an Express Tribune report. The new discovery is no doubt a big boon for the struggling economy.
Since 2021, Pakistan has been hit with mounting debt and skyrocketing inflation, with inflation hitting nearly 30%. Meanwhile, the economy only expanded 2.4% in 2023, missing the 3.5% target. This has forced the country to rely heavily on foreign aid, which is often elusive. In January this year, Pakistan sought $30 billion for gas production to cut its fuel import bill.
According to Pakistan’s Energy Minister Mohammad Ali, Pakistan has 235 trillion cubic feet (tcf) of gas reserves, and an investment of $25 billion to $30 billion would be enough to extract 10% of those reserves over the next decade to reverse the current declining gas production and replace the import of energy.
The persistently high inflation could push Pakistan over the edge, "There is no precedent in Pakistan’s history of such a long and intense spell of inflation gripping the country," columnist Khurram Husain has written in Dawn.
A Game-Changer? Maybe.
Although Pakistan's hydrocarbon resources are yet to be quantified, some estimates suggest that this discovery constitutes the fourth-largest oil and gas reserves in the world. This could be a potential game-changer in the region’s energy flows.
Back in July, S&P Global Commodity Insights reported that four largely unexplored sedimentary basins in India could hold up to 22 billion barrels of oil. In effect, lesser-known Category-II and III basins namely Mahanadi, Andaman Sea, Bengal, and Kerala-Konkan contain more oil than the Permian Basin which has already produced 14 billion of its 34 billion barrels of recoverable oil reserves.
Why No Major Oil Company Is Rushing To Drill Pakistan's Huge Oil Reserves | OilPrice.com
https://oilprice.com/Energy/Energy-General/Why-No-Major-Oil-Company-Is-Rushing-To-Drill-Pakistans-Huge-Oil-Reserves.html
Rahul Chauhan, an upstream analyst at Commodity Insights, emphasized the potential of India’s unexplored Oil & Gas sector, "ONGC and Oil India hold acreages in the Andaman waters under the Open Acreage Licensing Program (OALP) and have planned a few significant projects. However, India still awaits the entry of an international oil company with deepwater and ultra-deepwater exploration expertise to participate in current and upcoming OALP bidding rounds and explore these frontier regions," he has declared.
Currently, only 10% of India’s 3.36 million sq km wide sedimentary basin is under exploration. However, Petroleum Minister Hardeep Singh Puri says that that figure will jump to 16% in 2024 following the award of blocks under the Open Acreage Licensing Policy (OALP) rounds. So far, OALP has resulted in the award of 144 blocks covering about 244,007 sq km. Under OALP, India allows upstream exploration companies to carve out areas for oil and gas exploration and put in an expression of interest for any area throughout the year. The interests are accumulated thrice a year following which they are put on auction. According to Puri, India’s Exploration and Production (E&P) activities in the oil and gas sector offer investment opportunities worth $100 billion by 2030.
So why is no one rushing to Pakistan to drill?
Shell announced it was selling its Pakistan business stake to Saudi Aramco in June last year, and an auction for 18 oil and gas blocks at the same time last year got a muted response from international bidders, at best. No international companies even bid on 15 of the blocks, according to The Nation.
In July, the country’s Petroleum Minister, Musadik Malik, told a parliamentary committee that no international companies were interested in offshore oil and gas exploration in Pakistan,and those in the country largely had the exit door in view.
It comes down to security, and risk versus reward with Malik explaining to the committee that the cost of security is a major deal-breaker because “in areas where companies search for oil and gas, they have to spend a significant amount to maintain security for their employees and assets”. And security is provided by Pakistan, which has not been up to the task.
In March this year, five Chinese engineers were killed in a suicide attack in Pakistan’s northest, when a vehicle rigged with explosives rammed into a bus transporting staff from Islamabad to the giant Dasu dam project in the Khyber Pakhtunkhwa province. The project is part of the $62-billion China-Pakistan Economic Corridor (CPEC). This incident sparked a series of temporary shut-downs across other projects, as well.
Earlier that same month, insurgents attacked Chinese assets in Pakistan’s southwest, storming the Gwadar Port Authority complex, which is run by China. The attacks were perpetrated by the Balochistan Liberation Army (BLA), separatists fighting for an independent Balochistan, as reported by the Lowy Institute.
Essentially, what this means is that it will be China or bust for Pakistan, as state-owned or state-controlled Chinese explorers have a vastly different appetite for risk. And these massive reserves are not likely to get out of the ground without Aramco showing more desire or the Chinese stepping in, for which discussions are already underway, according to Malik.
In the meantime, Iran is said to be smuggling a billion dollars in fuel into Pakistan every year, as the country’s oil and gas crisis emboldens the black market trade.
USGS: Pakistan Mining Industry 2019
https://pubs.usgs.gov/myb/vol3/2019/myb3-2019-pakistan.pdf
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2018. In fiscal year 2019 (July 1, 2018, through
June 30, 2019), the mining and quarrying sector contributed
2.6% of the GDP and the growth rate of the mining and
quarrying sector was negative 1.96% compared with 7.72% in
fiscal year 2018 (International Monetary Fund, 2020; State Bank
of Pakistan, 2020a, p. 18–19; 2020b, p. 8; 2020d, p. 3).
The total import value in fiscal year 2019 was $54.8 billion
compared with $60.8 billion in fiscal year 2018. The import
value of mineral fuels, oils, and their distillation products was
$16.0 billion; iron and steel, $3.38 billion; articles of iron or
steel, $840 million; and aluminum and articles of aluminum,
$349 million. The total export value in fiscal year 2019 was
$23.0 billion compared with $23.2 billion in fiscal year 2018.
The export value of mineral fuels, oils, and their distillation
products was $477 million; salt, sulfur, lime, and stone,
$463 million; and copper and articles of copper, $269 million
(State Bank of Pakistan, 2020c, p. 123–124).
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In 2019, the production of lignite was estimated to have
increased by 180%; lead (mine, Pb content), by 68%; feldspar,
by 61%; chromium (mine, Cr2
O3
content), by 46%; zinc (mine,
Zn content), by 39%; talc, by 38%; lead (secondary, refinery),
by 33% (reported); soda ash, by 27%; bentonite, by 24%;
kaolin, by 17%; and sand and gravel (industrial, silica), by 12%.
In contrast, the production of fuller’s earth was estimated to
have decreased by 85%; dolomite, by 57%; bauxite, by 49%;
iron oxide pigment, by 47%; magnesite, by 39%; sulfur (native),
by 38%; pumice, by 33%; raw steel, by 30% (reported);
limestone, by 22%; iron (mine, Fe content) and phosphate rock
(gross weight), by 20% each; barite, by 15%; sand and gravel
(industrial, unspecified), by 13%; rock salt, by 12%; and quartz,
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Copper and Gold.—In 2019, Metallurgical Corporation
of China Ltd. (MCC) applied for an extension of its mining
license for the Saindak copper-gold mine, which was set to
expire in 2022. MCC operated the Saindak Mine through a
50%-owned subsidiary, Saindak Metals Ltd. The company
produced 13,049 metric tons (t) of copper (mine, Cu content)
in 2019, which was an increase of 4.1% from the 12,538 t
produced in 2018. MCC mined mainly the south and north ore
bodies using open pit mining; the deposits were expected to be
depleted of minable resources after 2021. The east ore body of
the mine was estimated to have 278 million metric tons (Mt)
of ore and an expected mine life of 19 years. The exports of
copper and articles thereof from Pakistan to China increased to
$550 million in 2019 from $106 million in 2016
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Natural Gas.—Pakistan was in the process of building five
liquefied natural gas (LNG) terminals that were expected to
start operation in 2021 or 2022. The new terminals would triple
Pakistan’s LNG imports and help lessen the gas shortage in
the country. Pakistan had been subject to shortages of natural
gas for power generation, fertilizer production, and household
usages owing to the country’s inability to supply enough gas
from domestic resources, its aged distribution network, and the
difficulty in sourcing LNG cargoes (Nickel, 2019; Abbasi, 2020;
Mohanty and others, 2021).
Petroleum.—Eni Pakistan Ltd. (owned by Eni S.p.A. of Italy,
as operator), Exploration and Production Pakistan BV, Oil and
Gas Development Co., and Pakistan Petroleum Ltd. each held a
25% interest in the Kekra-1 well of the Indus Block G. In 2019,
the consortium ended exploration at the Kekra-1 well after
no reserves of petroleum were found (Hassan, 2019; Rarrick,
2019).
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