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.

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.

Related Links:

Haq's Musings

South Asia Investor Review

US EIA Estimates of Oil and Gas in Pakistan

Methane Hydrate Release After Balochistan Quake

Thar Coal Development

Why Blackouts and Bailouts in Energy-Rich Pakistan?

Riaz Haq's Youtube Channel

Comments

Riaz Haq said…
Unprecedented growth witnessed in petroleum sector in five years


https://tribune.com.pk/story/1720526/1-unprecedented-growth-witnessed-petroleum-sector-five-years/

To step up search for oil and gas in potential areas across the country, the government encouraged oil and gas Exploration and Production (E&P) companies by providing maximum incentives.
Experts say the thrust produced satisfactory results.
The exploration activities registered 80 per cent increase with 40 per cent success rate. Drilling of appraisal and development wells went up by 12.8 per cent, discoveries rose by 151.3 per cent, 2D and 3D seismic surveys increased by 37.2 per cent and 43.1 per cent, respectively.
Consequently, domestic oil production grew by 29.8 per cent, meaning significant relief on the side of heavy oil import bill.

A senior official in the Petroleum and Natural Resources Division told APP that during first four years of the PML-N government, the companies drilled over 179 exploratory and 194 appraisal wells that resulted in 101 new oil and gas discoveries, while the previous government had drilled 100 exploratory and 172 appraisal/development wells, achieving just 39 oil and gas discoveries.
In the four-year span, more than 944 million cubic feet per day (mmcfd) of gas and 32,343 bpd oil were added to the transmission network across the country through indigenous resources.
The country’s total crude oil production reached around 90,000 bpd oil.
The official said 68 findings, out of total 101 discoveries, had added proven reserves of about 5.4 trillion cubic feet (tcf) gas, while calculations regarding 33 wells were yet to be determined. As many as 87 findings were made in Sindh, seven each in Punjab and Khyber-Pakhtunkhwa.
During the same period, the country is estimated to have consumed about 5.2 tcf gas which means that more than 100 per cent replacement had been made for the resource consumed.

Besides, over $10 billion foreign investment poured into the country’s petroleum sector, despite low oil price scenario in the international market.
Determined to achieve self-sufficiency in the energy sector, the government also completed a study in collaboration with USAID which confirmed the presence of 3,778 tcf shale gas and 2,323 billion of stock tank barrels (BSTB) shale oil in place resources.
Following which, a Shale Gas and Oil Centre has been established at the ministry to facilitate interested E&P companies in tapping the identified 188 tcf gas and 58 BSTB oil technically recoverable resources in lower and middle Indus Basin.
Besides, a consortium of Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL) has been formed to undertake pilot project(s) to determine cost of extracting shale gas and oil.
In a landmark development, Pakistan signed a 15-year agreement with Qatar for import of LNG to meet its growing energy needs as existing natural gas reserves were insufficient to bridge the ever-increasing gap between demand and supply of the commodity. The gas supply-demand gap has reached around 4 billion cubic feet per day (bcfd) as total gas demand of the country is 8.0 bcfd against total supply of 4.0 bcfd. Needless to say in winter, the demand rapidly increases.
It is believed that LNG was the cheapest alternative fuel and the only instant available remedy to meet the country’s energy needs when the existing natural gas reserves were diminishing.
Riaz Haq said…
Country’s oil import bill surges by 30.43pc to $12.928bn

https://profit.pakistantoday.com.pk/2018/06/20/countrys-oil-import-bill-surges-by-30-43pc-to-12-928bn/


Pakistan’s oil import bill rose nearly 30.43 per cent year-on-year to $12.928 billion in July-May 2017-18 owing to an increase in global prices of crude oil and rising demand of petroleum products in the country.

The amount of the oil import bills is around one-third of the total import bill for the period.

The trade deficit is widening as the overall import bill of the country has been on the rise since the start of 2017-18.

The State Bank of Pakistan (SBP) on Wednesday showed the current account deficit at around $15.961 billion in July-May 2017-18 billion which surged by 43 per cent as compared to the previous year.

Liquefied Natural Gas (LNG) imports rose by 84.5 per cent in the last eleven months of the current fiscal year to $2.123 billion as compared to the previous year’s gas imports worth $1,150 billion.

Official figures released by the Pakistan Bureau of Statistics (PBS) on Wednesday showed that the petroleum imports increased 30.5 per cent year-on-year to $12.928 billion which was around $9.912 billion in the same period last year.

A 60.35 per cent growth was recorded in the import of crude oil year-on-year to $3.738 billion. But in terms of quantity, a growth of 28.72 per cent was posted year-on-year to 9.45 million tonnes, indicating that a large share of the increase is on account of higher prices.

Imports of petroleum products went up 9.54 per cent to $6.808 billion the eleven-month period. The petroleum products recorded a nearly negative 4.66 per cent in quantity year-on-year to 14.362 million tonnes.

In the current fiscal, year the second-biggest component in the import bill was transport group whose import rose 27.88 per cent year-on-year to $3.821 billion in last eleven months of this fiscal year. The increase is due mainly to massive imports of busses/ trucks (60.8 per cent), and motor cycle (57.88 per cent).

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