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.

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?

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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).
Riaz Haq said…
Major oil find in #Pakistan near #Iran border. Minister for Maritime Affairs/ Foreign Affairs Abdullah Hussain Haroon says ExxonMobil has indicated that it is close to hitting huge #oil reserves which could be even bigger than #Kuwait's reserves. #energy

https://www.dawn.com/news/1424804

Addressing business leaders at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the minister said that ExxonMobil — an American multinational oil and gas company — has so far drilled up to 5,000 meters close to the Iranian border and is optimistic about the oil find.

The Government of Pakistan, he said, has already taken an undertaking from the company to set up a generation complex worth $10 billion.

The government is also encouraging Chinese and Western investment in the country, he added.

He further said that there is a need to integrate the Karachi Port and Port Qasim so that they could supplement each other in the larger interest of the country.

On the occasion, he said the Pakistan National Shipping Corporation (PNSC) has sufficient funds for purchasing two vessels but this will be done by next government.

The minister said that there is greater need to have new area for fish harbour because the existing one has many issues and there is shortage of land. However, he regretted that the harbour is not well kept and hoped that the European Union (EU) will give subsidy for new fish harbour.

“Foreign investors are interested in coming to Pakistan, provided we manage to meet their standards and attract them to make investment,” he stressed.

The minister advised that ports should be developed so that they could meet the country’s demand on the basis of its markets and products and fully supported the Karachi Port Trust (KPT) development projects highlighted by KPT Chairman Admiral Jamil Akhtar.

Responding to a question, Mr Haroon said that there was no need to give Pakistani land to foreigners, adding: “There is need that as a nation should take up such projects of national importance.”
Riaz Haq said…
#ExxonMobil close to hitting huge #oil #reserves in Pakistan, bigger than #Kuwait’s (100 billion barrels). If the oil deposits are discovered as expected, #Pakistan will be among the top 10 oil-producing countries (#OPEC), ahead of Kuwait in 6th position http://www.arabnews.com/node/1351556#.W2eASM-rU8g.twitter

The US energy giant has drilled up to 5,000 meters near the Pakistan-Iran border, says Pakistan foreign minister
If the oil deposits are discovered as expected, Pakistan will be among the top 10 oil-producing countries, ahead of Kuwait in sixth position
KARACHI: The US energy giant ExxonMobil is close to hitting huge oil reserves near the Pakistan-Iran border, which could be even bigger than the Kuwaiti reserves, says Abdullah Hussain Haroon, Pakistan’s caretaker minister for maritime affairs and foreign affairs.

ExxonMobil, the American multinational oil and gas company, has so far drilled up to 5,000 meters close to the Iranian border and is optimistic about the oil discovery, Haroon told business leaders at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI).
If the oil deposits are discovered as expected, Pakistan will be among top the 10 oil-producing countries ahead of Kuwait in sixth position.
Kuwait’s oil reserves make up 8.4 percent of the oil reserves in the world. Kuwait claims to hold about 101.50 billion barrels, including half of five billion barrels in the Saudi-Kuwaiti neutral zone which Kuwait shares with Saudi Arabia.
According to current estimates, 81.89 percent of the world’s proven oil reserves are located in OPEC member countries, with the bulk of OPEC oil reserves in the Middle East, amounting to 65.36 percent of the OPEC total, latest OPEC data shows.
Pakistan’s foreign minister also said that his government has already taken an undertaking from ExxonMobil to set up a generation complex worth $10 billion.
“They are also putting up an LNG berth at Port Qasim, the second seaport in Karachi. They have already paid for the drilling rights in Pakistan,” Haroon added.
He said: “Pakistan is providing a level playing field to foreign investors and they are interested in coming to Pakistan. What we need to do is to meet their standards and attract them to make investment.”
In May 2018, the ExxonMobil had acquired 25 percent stakes in offshore drilling in Pakistan. The agreement was signed at Prime Minister’s Secretariat among ExxonMobil, Government Holdings Private Limited, PPL, Eni and the Oil and Gas Development Corporation.
The agreement has reduced the drilling share of other partner exploration companies to 25 percent each.
Haroon said that Pakistan is being dragged into the US-China trade war but “the country is maintaining its impartiality.”
“When we sought a much-needed external loan from China, which they initially had refused, the US expressed its annoyance,” Haroon added.
Pakistan currently meets only 15 percent of its domestic petroleum needs with crude oil production of around 22 million tons; the other 85 percent is met through imports. The country facing huge current account deficit of up to $18 billion is spending a substantial amount of foreign exchange reserves on import of oil. The import bill of Pakistan rose by to $12.928 billion in the July-May 2017-18 period of the last fiscal year.
Pakistan’s foreign minister also talked about the current water crisis and its impact on Indo-Pak relations. “India is acting to control water flows which would endanger Pakistan’s food security and they would ruin our crops,” he said.
Haroon called for the integration of Karachi Port and Port Qasim so that they could supplement each other in the larger interest of the country.
Riaz Haq said…
Top 10 Countries in Proven Oil Reserves:

1.VENEZUELA 297.6 billion barrals

2. SAUDI ARABIA 267.91 billion barrels

3. CANADA Proven oil reserves: 173.105 billion barrels

4. IRAN Proven oil reserves: 154.58 billion barrels

5. IRAQ Proven oil reserves: 141.35 billion barrels

6.KUWAIT Proven oil reserves: 104 billion barrels

7. UNITED ARAB EMIRATES 97.8 billion barrels

8. RUSSIA 80 billion barrels

9. LIBYA 48 billion barrels

10. NIGERIA 37.2 billion barrels

http://geab.eu/en/top-10-countries-with-the-worlds-biggest-oil-reserves/
Riaz Haq said…
In Pakistan, ExxonMobil signed an agreement in May this year to take a 25-percent working interest in the Indus Block G offshore Pakistan, where the other partners in the block are Italy’s major Eni and Pakistan’s Government Holdings Pvt Ltd and Oil and Gas Development Company Limited (OGDCL).

According to Arab News, Pakistan currently meets just 15 percent of its petroleum demand with domestic crude oil production, while 85 percent of its demand is met with imports. With the high imports, and the higher oil prices in recent months, Pakistan faces a large current account deficit and spends a substantial portion of its foreign exchange reserves on importing oil.

https://oilprice.com/Energy/Crude-Oil/Pakistan-Exxon-Is-Close-To-Making-A-Mega-Oil-Discovery.html
Riaz Haq said…
Italy's ENI has acquired a 25% stake and operatorship in an ultra-deepwater block off Pakistan. Block G in Pakistan’s Indus Basin comprises approximately 7500km2. Eni currently holds participating interest in adjacent Indus block C (60%) and block N (70%).

https://www.oedigital.com/vessels/item/1477-exploring-indus
Riaz Haq said…
Minister Hussain Haroon denies quote about big oil find by Exxon Mobile in Pakistan


http://api.ning.com/files/921Jqs6UN3FtycsxGzvMNFrEGJCbffL*e7AXLZAoUQpBwaSMmX4GXNAVYvna-PrWqJD1aKn6xJi31JfnDE0Z8aoqqgcZ6K4f/IMG_0171.JPG

Riaz Haq said…
#Pakistan #Oil #Gas Exploration Company profit up 23% in FY2018: #OGDCL, #ExxonMobil, #ENI, #PPL plans ultra-deepwater #offshore drilling in #Arabian Sea in January 2019 https://www.thenews.com.pk/print/365295-company-profit-up-23-percent-in-fy2018-ogdcl-plans-ultra-deepwater-offshore-drilling-in-january-2019

The Oil and Gas Development Company (OGDC) on Friday said drilling in its ultra-deepwater offshore block is expected to start next year as the company has completed seismic work.


“… work on ultra-deepwater offshore well has been approved and the rig has been arranged, where work will start from January 2019, which will take about 4-5 years to develop,” a senior company official said at analysts briefing.

The briefing as arranged after an announcement of the company’s financial results for the year 2017/18.

Industry officials said a joint venture comprising OGDC, Pakistan Petroleum Limited (PPL), ENI and ExxonMobil, have planned drilling of the first exploratory well Kekra-1 in offshore Indus G-Block with a total investment of $70 million.

Pakistan’s oil and gas sector witnessed a major development recently when the world’s largest energy company ExxonMobil acquired 25 percent stake in Pakistan’s offshore Indus G block. This development could be seen as a major breakthrough as it might lead other international energy firms to bring foreign investment in Pakistan’s energy sector.

Indus G block is approximately 7,500 square kilometres located in ultra-deep water offshore Pakistan. ENI is the operator of the block. OGDCL officials said Tal block pricing case is in the court and the new government is willing to discuss all existing issues.

The issue is expected to be settled in FY19, they said.

OGDCL sees stagnant growth in gas production as “a challenge”.

In the next two years, the OGDC should be able to come up with 150mmcd of gas.

“With natural depletion and incremental gas production, the company will be able to sustain its gas production at current levels going forward,” the company’s official said.

Profit of the company increased 23 percent in the year ended June 30, 2018, compared with the preceding year. This was on the back of higher crude oil prices and growth in sales.

Oil price hike and rupee depreciation lifted profit of Oil and Gas Development Company Limited (OGCL) up a decent 23 percent at Rs78.736 billion during the financial year ended June 30, translating into earnings per share (EPS) of Rs18.31.

OGDCL’s profit amounted to Rs63.803 billion with EPS of Rs14.83, the company said in a filing with the Pakistan Stock Exchange.

The company announced a final cash dividend of Rs2.5/share, taking full-year payout to Rs10/share.

Overall receivables due to circular debt have increased, but at the same time, cash position of the company has strengthened.

Brokerage First Capital Equities Limited said sales jumped 19 percent to Rs205.335 billion in FY2018.

Benchmark Arab Light oil prices advanced 28.4 percent to average $62.3/barrel in FY2018. Rupee depreciated around five percent during the financial year.

Sales increased despite falling hydrocarbon volumes during the year.

“Exploration expense came in at Rs16.19 billion above our forecasted figure of Rs14.94 billion due to recording of a previously-suspended well at Ranipur, while quantum of other income stayed at the previous year’s level,” First Capital Equities said in a flash report.

OGDCL said the company recorded significant increase in seismic efforts and drilling activities during the year. The company paid Rs33.890 billion on the account of taxes.

Analyst Ahsan Arshad at Taurus Securities exploration cost rose 22 percent year-over-year as the company booked 11 dry wells as against four dry wells in the corresponding year.

Analyst Aftab Awan at Sherman Securities said the gross margin of the company improved to 59 percent in FY2018 from 55 percent in FY2017 mainly due to improved oil and gas prices and reduction in operating costs.
Riaz Haq said…
Huge #gas reserves discovered in #Makran region of #Pakistan. A recent oceanographic survey conducted in the coastal belt found huge gas offshore. reserveshttps://www.thenews.com.pk/latest/393778-major-gas-reserves-discovered-in-makran

Chairman Joint Chiefs of Staff Committee (JCSC) Gen Zubair Mahmood Hayat on Wednesday revealed that major gas reserves have been discovered along the Makran coast.

Speaking at a conference in Karachi, Gen Zubair said Pakistan is blessed with minerals worth billions of rupees.

A recent oceanographic survey conducted in the coastal belt discovered huge gas reserves, he told the audience in a QA session.

He termed the youth an asset for country's prosperous future. ‘Pakistan can achieve high growth progress through the information technology and social media in e-commerce.’

Pakistan is sitting on ninth biggest shale gas reserves, he further added.
Riaz Haq said…
How America Broke #OPEC With New #Technologies. #American output is rising at the fastest rate in a century. Earlier this year the U.S. eclipsed #SaudiArabia and #Russia as the world’s largest #oil producer. #fracking #deepwater drilling https://www.wsj.com/articles/how-america-broke-opec-11544831785 via @WSJOpinion

U.S. crude production has surged 20% in a year and nearly tripled in a decade thanks to advances in hydraulic fracturing and horizontal drilling. American output is rising at the fastest rate in a century. Earlier this year the U.S. eclipsed Saudi Arabia and Russia as the world’s largest oil producer.

For nearly six decades OPEC has dominated oil markets by setting production quotas among its 15 members. In late 2014, OPEC flooded the market with oil in an effort to break U.S. drillers who were burning cash on mounds of debt. As oil prices fell below $40 a barrel in 2015-2016, many wildcatters folded or were absorbed by larger producers.

But the survivors became more efficient. Technology—including drones with thermal imaging to detect leaks along with improvements in horizontal drilling—boosted productivity. Over the last five years production per rig has more than tripled in the Permian Basin and quadrupled in North Dakota’s Bakken Shale. While the Bakken rig count has fallen by 70%, output has increased by a third.

Most American oil refineries have processed heavier crudes, which depressed prices for lighter, sweeter grades produced in the new wells. But in late 2015 the GOP Congress expanded shale-oil’s market by lifting the export ban on crude in return for Barack Obama’s demand to extend renewable energy tax credits. U.S. crude exports have since soared to 3.2 million barrels a day.

Many U.S. producers say they can turn a profit at $50 a barrel and even as low as $30 in the Permian’s most productive regions. Yet most OPEC members need prices ranging between $70 and $90 per barrel to balance their budgets. The cartel scaled back output in 2016, but shale producers roared back as prices recovered. America’s shale gusher has presented a quandary for OPEC and especially its largest member, Saudi Arabia, which faces large budget deficits as it works to contain Iranian influence in the Middle East.

Earlier this year, the Saudis obliged President Trump by increasing output to prevent prices from soaring with the reimposition of U.S. sanctions on Iran. Even so oil prices hit a four-year high in early October. But they have since declined 30% amid weakening world economic forecasts, sanctions exemptions and surging U.S. production.

OPEC and Russia last week agreed to scale back production collectively by 1.2 million barrels a day, but the meeting exposed the cartel’s cracks. Qatar quit amid hostilities with the Saudis. Small producers carped they were too insignificant to affect global supply. Algeria produces one million barrels per day, which is as much as U.S. output has increased in five months.


Saudi Arabia, Russia and allied producers agreed to shoulder the bulk of the cuts while Libya, Iran and Venezuela received exemptions. Some in the media claim the Saudis defied Mr. Trump’s pleas to keep oil prices low, yet U.S. shale producers are likely to benefit from OPEC’s cuts by capturing more market share.

One of the biggest constraints on U.S. production has been a distribution bottleneck. Hence West Texas Intermediate now sells at a $8 to $9 discount to Brent crude on the world market. But next year three pipelines capable of delivering two million barrels of Permian crude to the Gulf Coast are expected to come online. In 2020 two more pipelines that can carry two million barrels a day are expected to be completed.

Oil companies are also racing to build more export terminals to handle the supply gusher, which isn’t likely to stop anytime soon. The U.S. Geological Survey reported recently that the Permian’s Delaware Basin holds more than twice as much oil and 18 times as much natural gas as the heavier-drilled Midland region.
Riaz Haq said…
#Pakistan #ExxonMobil offshore drilling site #Kekra-1 143 miles from #Karachi is among top 3 potential "big oil finds" in #Asia
https://www.bloomberg.com/news/articles/2019-01-14/oil-wildcats-to-watch-for-signs-of-asia-drilling-drop-reversal

“Explorers are getting a little bit more ambitious in this part of the world,” Andrew Harwood, the consultancy’s Asia-Pacific upstream research director, said in an interview in Singapore. “These are huge companies with global portfolios; they’re not spending the money to drill unless they have a reason to be excited.”

Wood Mackenzie expects mergers and acquisition spending in the region to total about $8 billion in 2019 after growing 60 percent to $8.7 billion 2018. Activity will be focused around divestments in Southeast Asia by companies that want to focus spending on U.S. shale.

Here’s a closer look at the three Asia-Pacific prospects Wood Mackenzie is paying the most attention to:

Pakistan
A group including Eni SpA and Exxon Mobil Corp. will start drilling the Kekra-1 well this month in deepwater south of Pakistan. The country’s onshore natural gas production has been declining after years of under-investment, leading to the start of liquefied natural gas imports in recent years. Growing demand for the fuel has made the drillers more confident that they’ll be able to sell any gas from a sizable development, Harwood said.


---------

Pakistan: ExxonMobil Begins Drilling off Karachi Coast

https://worldview.stratfor.com/situation-report/pakistan-exxonmobil-begins-drilling-karachi-coast


What Happened: ExxonMobil has begun drilling for oil and gas 143 miles off the coast of Karachi in the Arabian Sea, Daily Pakistan reported Jan. 10.

Why It Matters: The operations mark the first time an energy company is conducting offshore exploration along Pakistan's coast. An ExxonMobil executive has said the company has been considering launching operations in the region because of Pakistan's growing energy demand.

Background: Only 15 percent of Pakistan's energy consumption is met by domestic production. High energy prices have significantly inflated the country's import bill and contributed to draining its foreign exchange reserves.


Riaz Haq said…
At Kekra I, 143 miles from #Karachi coast, gas flows can be as big as Sui field at 3 to 8 trillion cubic feet (TCF), or 25-40 percent of #Pakistan’s total #gas reserves.Well diameter is 18 to 24 inches. Current depth of 1900 feet. Good news by April. https://www.thenews.com.pk/latest/419865-kekra-i-gas-flows-can-be-as-big-as-sui-field

Ghulam Sarwar Khan, Federal Minister for Petroleum met Mr. Irtiza Syed, CEO, EXXON Mobil on Wednesday at his office.

Irtiza briefed minister about progress at Indus G Block.

According to a press release issued by the petroleum ministry, Ghulam Sarwar Khan said 2019 will be good year for all of us. Exxon Mobil has started spud in.



The well’s diameter is 18 to 24 inches. Right now they are at depth of 1900 feet, hence its ultra-deep exploration. It will give its first good news in March or April.

Exxon Mobil has given the target depth of 5500 feet. In March, Exxon Mobil will send a specimen to Houston for examination.

Similarly ENI will send the specimen to Milan in March. From April to May there will be a reasonable idea that this well contains oil or gas.

The discovery is anticipated to yield gas flows which can be as big as Sui field, with estimated reserves of 3 to 8 trillion cubic feet (TCF), or 25-40 percent of Pakistan’s total gas reserves.

Pakistan Exploration and Production (E&P) companies along with international partners have ventured into offshore territory of underexplored but promising Indus G Block for deep sea drilling endeavor.

The operator of the block, ENI has chartered, Saipem, a rig ship to drill the exploration well , located 230 kms South West of Karachi. ENI is an Italian company working in Pakistan since 2000.

This endeavor is a joint venture (JV) formed by ENI, Exxon Mobil, OGDCL and PPL to spud Kekra I exploration well in Indus G Block.

The exploration cost is estimated at 75 million dollars. Right now more than 200 people are working at the ship. After exploration, employment will be generated. If it will be a successful discovery, then for next 25 to 30 years, Pakistan can use this gas.

After its success, Exxon Mobil will spud in more wells. Till 2021 to 2022, a facility will be made here. Ghulam Sarwar Khan also invited Exxon Mobil for on shore exploration. He said that he will make ways easy for international investment.

For this purpose duties and taxes have been waived off on import of drilling equipment. During meeting, Stephen, Vice President, Exxon Mobil was also present.
Riaz Haq said…
Will rising demand, new exploration activity and a refresh of government policy bring renewed confidence in Asia-Pacific’s upstream industry in 2019? Wood Mackenzie’s research director Andrew Harwood shares his thoughts.

https://www.hellenicshippingnews.com/will-asia-pacifics-og-sector-join-the-global-recovery-in-2019/

Big exploration slowly returning
The need to fill new and old gas infrastructure will see the drilling of exciting offshore prospects across Australia, Brunei, Malaysia,Myanmar, Pakistan and Papua New Guinea. Some will be frontier deepwater exploration. But access to gas demand centres will be the primary driver of which prospects make the grade.

Our top three wells to watch in 2019 involve some of the world’s most successful exploration companies – hopes are high for sustained success:

• Offshore Pakistan, ExxonMobil and Eni will spud the ultra-deepwater Kekra-1 well in early 2019, targeting a carbonate play that could be a game-changer for the country’s burgeoning gas market.

• Repsol’s Rencong-1X well, offshore North Sumatra, Indonesia, is generating strong interest from potential farm-in partners. We expect a deal to be done before the well spuds in Q3 2019.

• In Papua New Guinea, Total’s Mailu-1 well is targeting a giant oil prospect in over 2000 metres of water, potentially opening a new ultra-deep offshore play in the Papuan Basin.

From a licensing perspective, several countries are set to launch new bid rounds in 2019. But only those offering a fair balance of risk and reward will be successful in attracting new investment. Despite recent fiscal revisions in India and Indonesia, we expect lacklustre interest in their latest acreage offerings, and investor appetite is likely to be limited for other 2019 licensing opportunities in the Philippines, Bangladesh and Myanmar.

M&A maintains momentum
M&A spend grew over 60% to US$8.7 billion in 2018 compared to 2017. We expect 2019 to be flat with around US$8 billion of potential deals in the pipeline.

We expect to see divestments in Southeast Asia by primarily US-focused players, such as Hess, ConocoPhillips and Chevron, seeking to redeploy capital towards lower-cost, higher-return opportunities elsewhere.

With a steady supply of international oil companies (IOC) assets potentially becoming available, and the region’s national oil companies (NOCs) on the hunt for new partners to share financial and technical commitments, there should be no shortage of acquisition opportunities in 2019.

Deal activity in Australia is also likely to continue at a brisk pace, as LNG operators position themselves for the next wave of investment, and local producers look to take advantage of a tightening domestic gas market.

Asia-Pacific O&G Outlook 2019
Join the Asia Pacific oil and gas research team as they gaze into their crystal ball and run down some of their top themes and events to look for in 2019.

Fewer project sanctions
Contrary to global trends, 2019 looks a relatively low-key year for new project sanctions in Asia-Pacific. PetroVietnam’s Block B gas development and ConocoPhillips’s Barossa are the largest projects targeting FID over the next 12 months, but both are in danger of being pushed into 2020.

As attention in Australia’s LNG sector turns towards backfilling the existing Pluto and North West Shelf infrastructure, collaboration among operators is becoming a genuine option. Woodside’s Scarborough and Browse are the most likely medium-term candidates to provide new feedgas. But Chevron’s Clio-Acme development may leapfrog both with a surprise 2019 FID if commercial arrangements for third-party access to LNG infrastructure can be finalised. If so, it would be quite a turnaround for an industry not known for playing together in the past.

Riaz Haq said…
#Pakistan Aims To Become A Natural Gas Hotspot. It has estimated conventional #gas reserves of 20 trillion cu ft and #shale gas reserves exceed 100 trillion cu ft, making it attractive to foreign #energy investors. #FDI OilPrice.com https://oilprice.com/Energy/Natural-Gas/Pakistan-Aims-To-Become-A-Natural-Gas-Hotspot.html?utm_source=tw&utm_medium=tw_repost #oilprice

Pakistan is eager to open up its gas deposits to foreign energy companies in a bid to boost domestic production amid soaring demand, two government officials told media this week. The country has trillions of cubic feet in natural gas reserves, and although some of these have been exploited, the last decade has seen an outflow of foreign energy investors because of Islamist violence. Is the worst over?

Pakistan, a country with a fast-rising population, has recently been plagued with power outages largely resulting from a shortage of fuel necessary to keep its power stations going. Imports of gas and LNG are on the rise, but Imran Khan’s government seems to be aware that domestic production is almost invariably cheaper.

As a result, Pakistan is now preparing to start tendering gas blocks to all parties interested in exploration.

“I expect in the second half of this year we will be auctioning at least 10, if not 20 blocks for exploration,” the head of the government’s task force for an energy reform, Nadeem Babar, told Reuters earlier this week. He added that the government was in the process of making changes to its natural gas exploration and production regulations and drafting the country’s first ever shale resource policy.

“Pakistan provides a level playing field for all the E&P companies and even state-owned companies also have to participate in bidding rounds and compete with other companies,” said the country’s Minister for Petroleum and Natural Resources as quoted by The News International.

Pakistan imports nearly 80 percent of energy requirements from the international market. The country’s demand for energy has been increasing by 8 percent a year,” Ghulam Sarwar Khan also said, adding the government was doing its best to make Pakistan a more investor-friendly country as part of efforts to change the status quo in energy supply and demand.

Pakistan has estimated conventional gas reserves of 20 trillion cu ft and shale gas reserves exceed 100 trillion cu ft, which certainly makes the country an attractive destination for gas drillers as long as the security situation remains stable.

So far, the authorities have delineated more than 30 gas blocks, all onshore, Babar also told Reuters. If these attract sufficient interest, they could go a considerable way towards reducing the gas shortage plaguing the country, where demand for gas for 2017/18 was calculated at 6.9 billion cu ft daily, exceeding production by almost 3 billion cu ft.

With such demand levels—and rising, too—Pakistan is naturally an attractive destination for gas exploiters. Russia, Iran, and Qatar are all large suppliers. Earlier this week, Pakistani media reported government officials were negotiating an increase in Qatari LNG imports from 500 billion cu ft daily to 700 billion cu ft daily. Last month, the government inked an import deal with Gazprom for 500 million to 1 billion cu ft daily.

The country also recently completed two LNG import terminals but the super-cooled fuel is more expensive than Islamabad would like, especially given its level of import dependency.

According to Nadeem Babar, Aramco, Gazprom, and Exxon have already expressed interest in some of the blocks to be auctioned later this year. Italy’s Eni is already active in Pakistan and may join the bidders along with others attracted by the underexplored resources in the country where one of three wells yields commercial gas.

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