Massive Oil Discovery in Pakistan: Hype vs Reality

[Riaz Haq]

Prime Minister Imran Khan has recently raised Pakistanis' hopes of ExxonMobil and ENI being on the verge of a massive discovery of offshore oil and gas reserves in Pakistan. Is this real? Or mostly hype? What is the size of these reserves? Will it be more than sufficient to meet Pakistan's current needs of over 200 million barrels of oil per year? Will Pakistan become a net exporter of oil and gas like major OPEC nations?

Top 3 Offshore Drilling Sites in Asia-Pacific. Source: Bloomberg

Why is it taking so long to get confirmation from the companies involved? What are the technical issues in getting confirmation of these huge reserves? Why is there such a big concern about blow-out? Is it because the 1.5 billion barrels pre-drill estimate of Kekra-1 well in block G of the Indus basin off the Karachi coast? Could such a large reserve cause a major blow-out accident like the one British Petroleum had in Gulf of Mexico near Louisiana in the United States? How long will it take to fix the blow-out preventer (BOP) and complete drilling of the remaining 600-800 meters of the total depth of over 5,500 meters deep in the Arabian Sea?

Offshore Blowout Preventer Stack. Courtesy: British Petroleum

Azad Labon Kay Sath host Faraz Darvesh discusses these questions with Misbah Azam and Riaz Haq (www.riazhaq.com)

https://youtu.be/02oKLNPmUdk

Related Links:

Haq's Musings

South Asia Investor Review

Pakistan's Insatiable Appetite For Energy

US EIA Estimates of Oil and Gas in Pakistan

Pakistan's Debt Crisis

Can Pakistan Avoid Recurring IMF Bailouts?

Pakistan is the 3rd Fastest Growing Trillion Dollar Economy

CPEC Financing: Is China Ripping Off Pakistan?

Information Tech Jobs Moving From India to Pakistan

Methane Hydrate Release After Balochistan Quake

Thar Coal Development

Why Blackouts and Bailouts in Energy-Rich Pakistan?

Riaz Haq's Youtube Channel

PakAlumni Social Network

[Riaz Haq]

USGS: Pakistan Mining Industry 2019

https://pubs.usgs.gov/myb/vol3/2019/myb3-2019-pakistan.pdf

------
2018. In fiscal year 2019 (July 1, 2018, through
June 30, 2019), the mining and quarrying sector contributed
2.6% of the GDP and the growth rate of the mining and
quarrying sector was negative 1.96% compared with 7.72% in
fiscal year 2018 (International Monetary Fund, 2020; State Bank
of Pakistan, 2020a, p. 18–19; 2020b, p. 8; 2020d, p. 3).
The total import value in fiscal year 2019 was $54.8 billion
compared with $60.8 billion in fiscal year 2018. The import
value of mineral fuels, oils, and their distillation products was
$16.0 billion; iron and steel, $3.38 billion; articles of iron or
steel, $840 million; and aluminum and articles of aluminum,
$349 million. The total export value in fiscal year 2019 was
$23.0 billion compared with $23.2 billion in fiscal year 2018.
The export value of mineral fuels, oils, and their distillation
products was $477 million; salt, sulfur, lime, and stone,
$463 million; and copper and articles of copper, $269 million
(State Bank of Pakistan, 2020c, p. 123–124).

---------
In 2019, the production of lignite was estimated to have
increased by 180%; lead (mine, Pb content), by 68%; feldspar,
by 61%; chromium (mine, Cr2
O3
content), by 46%; zinc (mine,
Zn content), by 39%; talc, by 38%; lead (secondary, refinery),
by 33% (reported); soda ash, by 27%; bentonite, by 24%;
kaolin, by 17%; and sand and gravel (industrial, silica), by 12%.
In contrast, the production of fuller’s earth was estimated to
have decreased by 85%; dolomite, by 57%; bauxite, by 49%;
iron oxide pigment, by 47%; magnesite, by 39%; sulfur (native),
by 38%; pumice, by 33%; raw steel, by 30% (reported);
limestone, by 22%; iron (mine, Fe content) and phosphate rock
(gross weight), by 20% each; barite, by 15%; sand and gravel
(industrial, unspecified), by 13%; rock salt, by 12%; and quartz,

--------

Copper and Gold.—In 2019, Metallurgical Corporation
of China Ltd. (MCC) applied for an extension of its mining
license for the Saindak copper-gold mine, which was set to
expire in 2022. MCC operated the Saindak Mine through a
50%-owned subsidiary, Saindak Metals Ltd. The company
produced 13,049 metric tons (t) of copper (mine, Cu content)
in 2019, which was an increase of 4.1% from the 12,538 t
produced in 2018. MCC mined mainly the south and north ore
bodies using open pit mining; the deposits were expected to be
depleted of minable resources after 2021. The east ore body of
the mine was estimated to have 278 million metric tons (Mt)
of ore and an expected mine life of 19 years. The exports of
copper and articles thereof from Pakistan to China increased to
$550 million in 2019 from $106 million in 2016

----------

Natural Gas.—Pakistan was in the process of building five
liquefied natural gas (LNG) terminals that were expected to
start operation in 2021 or 2022. The new terminals would triple
Pakistan’s LNG imports and help lessen the gas shortage in
the country. Pakistan had been subject to shortages of natural
gas for power generation, fertilizer production, and household
usages owing to the country’s inability to supply enough gas
from domestic resources, its aged distribution network, and the
difficulty in sourcing LNG cargoes (Nickel, 2019; Abbasi, 2020;
Mohanty and others, 2021).
Petroleum.—Eni Pakistan Ltd. (owned by Eni S.p.A. of Italy,
as operator), Exploration and Production Pakistan BV, Oil and
Gas Development Co., and Pakistan Petroleum Ltd. each held a
25% interest in the Kekra-1 well of the Indus Block G. In 2019,
the consortium ended exploration at the Kekra-1 well after
no reserves of petroleum were found (Hassan, 2019; Rarrick,
2019).

[Riaz Haq]

Kuwait joins Pakistan offshore bids

https://tribune.com.pk/story/2541890/kuwait-joins-pakistan-offshore...


ISLAMABAD:
Kuwait Foreign Petroleum Exploration Company (Kufpec) has decided to participate in Pakistan's offshore bidding round. Already, the company has been in Pakistan since 1987 and has invested $1.5 billion cumulatively.

A high-level meeting was held between Federal Minister for Petroleum Ali Pervaiz Malik and Ali Taha Al-Temimi, Country Manager of Kufpec and Chairman of the Pakistan Petroleum Exploration & Production Companies Association (PPEPCA). The meeting focused on strengthening collaboration in Pakistan's oil and gas sector, enhancing exploration activities, and addressing key challenges to enhance exploration activities.

———-



Ali Taha Al-Temimi, representing Kufpec – a leading international exploration company and a subsidiary of Kuwait Petroleum Corporation – appreciated the government's efforts and shared insights on optimising hydrocarbon exploration to meet Pakistan's growing energy demand. He apprised that Kufpec is aiming to participate in the offshore bidding round of Pakistan. Moreover, he briefed on the ongoing activities of the company in the country. Since 1987, Kufpec has invested $1.5 billion cumulatively.