Advisor to the Ministry of Petroleum and Natural Resources/Chairman Oil and Gas Company Limited Zahid Muzaffar has disclosed that there is no equipment with OGDCL for shale gas exploration and efforts are being made to invite local and foreign private investors for joint ventures in this sector.
He said this while talking to Finance Minister Senator Ishaq Dar. They discussed the issues related to foreign direct investment in oil and gas sector.
In a detailed briefing, Advisor Petroleum Ministry informed the Finance Minister that the total consumption of petroleum products in the country are 21.2 million TOE and of which local crude oil production is 4.7 MTOE only. He said that in 2014, maximum ever 41 block licences have been issued and in the last one year over 30,000 barrels per day have been added to the system from 68,000 bp/d in July 2013 to over 100,000 bp/d as of today. He mentioned that in only one year, the production of local oil has increased by 30-40pc and it is due to the commitment of the Federal Government that the situation is improving every day.
He informed the Finance Minister that during the last one year, 539mmcfd of natural gas has been added to the system. However in the old gas fields, there has been a significant decline due to non-availability of modern equipment needed for gas exploration. He disclosed that there is no equipment with OGDCL for shale gas exploration and efforts are being made to invite local and foreign private investors for joint ventures in this sector.
He further informed that Pakistan is an under explored country where only 44pc area is explored whereas the success rate is much higher as compared to other regions including Middle East. He said that in Pakistan exploration well success ratio is 1:3 whereas in Middle East it is 1:5 or more. He said that the OGDCL plans to increase efficiencies in the seismic, drilling, production and processing by establishing partnership with latest technology partners. He informed that foreign exploration and production companies will be invited to participate as joint venture partners. He discussed the plans for attracting FDI to accelerate domestic production in oil and gas sector.
On LPG, he informed that in the last one year, the domestic production has been doubled from 1000 MT/day in July 2013 to over 2000 MT/day. In line with directives of the Prime Minister, LPG will be provided to cities of Balochistan and far flung areas where there is no gas transmission line and distribution system, he added.
The Finance Minister while reiterating his belief that the country is rich in treasures of oil and gas said that the government has already announced special incentives for foreign direct investment in oil and gas exploration and it is high time that the foreign companies should be invited to invest in Pakistan. He informed the Advisor that the corporate tax rate has been reduced from 33pc to 20pc if the investment project is set up by 13th June 2017 and at least 50pc of the total project cost is in the form of equity through FDI. He said that to achieve the vision of an industrialised Pakistan in the future, we have announced this special package.
The Finance Minister directed the Advisor Petroleum Ministry for adopting an aggressive marketing strategy to attract foreign investment in the light of the new incentives given in the Finance Bill 2014-15. The Finance Minister added that a comprehensive strategy and vision is required to overcome the energy crisis and to increase significantly the oil and gas production in order to operate it on international standards. He assured the Advisor that the Finance Ministry will facilitate FDI in oil and gas sector.