| Kuwait Petroleum awarded block for exploration in DI Khan | Abbasi says proposed ‘flexible’ contract with Qatar will be tabled before ECC for approval

islamabad

Government is committed to meet the deadline of importing liquified natural gas (LNG) by the end March and first shipment is expected to reach Karachi on March 26.

“We are committed to meet deadline of March 31 to import LNG from Qatar,” Petroleum Minister Shahid Khaqan Abbasi said while talking to journalist on the occasion of awarding oil and gas exploration block to Kuwait Petroleum Exploration Co on strategic basis here on Friday.

He said that long term LNG supply contract with Qatar had been finalized and Pakistan would be receiving 200 million cubic feet per day (mmcfd) in first year which amounts to 1.5 million ton per year. He said that LNG would be 14 per cent cheaper compared to LSFO and 40 per cent cheaper than furnace oil. He said that pipeline capacity had been allocated to power sector however, overflow of LNG would be provided to CNG on fortnightly basis.

He said that proposed contract of LNG supply would be tabled before Economic Coordination Committee (ECC) for approval. However, he refused to disclose other features of LNG supply contract with Qatar including price. He added that LNG contract with Qatar was flexible which was good for the country. He said that LNG consumers including power sector would bear expenses of average Unaccounted for Gas (UFG) based on three years. He said that government was also focusing to strike LNG import deal with other countries. He maintained that government would pursue three options for LNG import which include long term, short term and spot purchases.  

The Minister for Petroleum said that notices to 19 companies had been issued to cancel their licenses for exploration. He said that government had already cancelled one license of exploration blocks over failure of initiating work.  

Meanwhile, an agreement was signed between Kuwait State owned Petroleum Exploration Co and government of Pakistan to award block to the latter. Kuwait Petroleum will do exploration in a block 3170-50 Paharpur over an area of 2260.70 sq km located in Dera Ismail Khan with firm commitment of $9.5 million investment. The company has committed to spend $30,000 per year in the block on social welfare schemes. Sheikh Nawaf Saud Al-Sabah, the chief executive officer of KUFPEC said that they were working with dedication due to investment friendly environment in Pakistan. He said that Pakistan was rich in oil and gas resources and provides lot of opportunities for investment in upstream sector.

Our Staff Reporter adds: The present government has granted 46 new blocks for exploration of gas and oil, increasing the area under exploration to 363,639 sq kms from 269,152 sq kms, up by 35 per cent. Moreover, around 32,000 bbl of oil production per day have been added and over 500 MMCFD additional gas has also been injected in the gas network system. Pakistan domestic oil production has touched its highest level to 100,698 barrels per day. The Petroleum Ministry authorities said that current government has taken various measures to create an investment friendly environment in the exploration & production (E&P) sector to attract investment.  Due to the efforts of the Ministry of Petroleum & Natural Resources, about 173 wells have been spud, 47 discoveries have been made and 17 Leases have been granted during the tenure of this government.

The aforesaid performance is the result of effective monitoring of E&P activities in accordance with the work commitments. Various steps are also being taken to improve the regulatory oversight and procedures have been developed to streamline and facilitate the regulatory approvals.

The government is also exploring various options, including award of exploration blocks on strategic partnership basis, which may open a window for foreign companies to invest in the E&P sector. The Government of Kuwait has taken keen interest in the upstream petroleum sector and intends to invest more in the exploration of oil and gas in Pakistan.  It had recently requested for award of exploration blocks on strategic partnership basis and Kirthar Pakistan B.V., a subsidiary of Kuwait Petroleum Corporation (a wholly owned company of the Government of Kuwait) had applied for acquiring Petroleum Rights in Paharpur Block on Government to Government basis. The Cabinet in it meeting of 23rd February, 2015, approved signing of the MoU between the Ministry of Petroleum and Natural Resources, Government of Pakistan, and its Kuwaiti counterpart over the Paharpur Block.