KPC Review

KPC ... helping Pakistan tap its hydrocarbon resources

KPC ... helping Pakistan tap its hydrocarbon resources

Pakistan, Kuwait sign oil and gas MoU

Pakistan has a large sedimentary basin covering over 827,268 sq km and spread over both onshore and offshore. The majority of the area has remained unexplored

A MEMORANDUM of Understanding (MoU) has been signed between the Government of Pakistan, Kuwait Petroleum Corporation and Kithara Pakistan for exploration of oil and gas in Baharpur block.

The ceremony was witnessed by Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi and Advisor to the Ministry of Petroleum and Natural Resources.

The MoU, Exploration licence (EL) and Petroleum Concession Agreements (PCA) were signed by Sheikh Nawaf Saud Nasir AlSabah, the chief executive officer of Kuwait Foreign Petroleum Exploration Company (Kufpec), Secretary ministry of Petroleum and Natural Resources Arshad Mirza and Saeedullah Shah, director general Petroleum Concessions.

The government executed PCA and EL over Block No31705 (Baharpur) with Kithara Pakistan BV.

The Baharpur block is located in Dera Ismail Khan and Tank districts of Khyber Pakhtunkhwa with a small part of Bhakkar district of Punjab. The total area of the block is 2260.79 km and minimum firm work commitment is $9.5 million including drilling of two exploratory wells. Apart from minimum work commitment, the company is obligated to spend a minimum of $30,000 per year in the block on social welfare schemes.

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. Pakistan has a large sedimentary basin covering over 827,268 sq km and spread over both onshore and offshore. Majority of the area has remained unexplored or under explored.

The current government has taken various measures to create an investment friendly environment in the Exploration and Production (E&P) sector to attract investment.

Due to the efforts by the ministry of Petroleum and Natural Resources, 173 wells have been spud, 47 discoveries have been made and 17 leases have been granted during the tenure of this government. The grant of 46 new blocks during the tenure of the current government has increased the area under exploration from 269,152 sq km to 363,639 sq km (35 per cent increase), which is now about 44  per cent of the total sedimentary area.

Moreover, around 32,000 barrels 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 touched its highest level on December 7, 2014 100,698 barrels per day. 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.




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