“Oil & Gas Sector of

Pakistan “

Presenters :
Adil Sethi
Kamil Iqbal
 Agenda
 Pakistan Primary Energy Mix
 Global and Regional Comparison
 Pakistan Oil & Gas Resources and
Infrastructure
 Causes For Increase in Oil Price
 Today’s Global and Domestic Prices
 A Road Map to an Efficient
Oil & Gas Sector
 Some Options for Pakistan’s Energy Sector
Pakistan Primary Energy Mix
FY-07
Consumption: 58 Million
TOE

• Oil : 28.4 %
• Gas : 50.4 %
• Hydro: 12.7 %
• Coal: 7.0 %
• Nuclear: 1.0 %
•
Pakistan Primary Energy Mix
YR-2006
Global and Regional
Comparison.
 World Oil Reserves
 Total world oil reserves are approximately 1,081 to
1,317 billion barrels (2007)

 Pakistan: 358,900,000 barrels = 0.03% of

world (2007)
 World Oil Supply
Total world’s supply 75 million barrels/day (2005)

Pakistan: 63,000 Barrels per day i.e 0.063 mb/d.

Which is 0.08% of world. (2005)
 Oil Consumption

 Total Consumption of world : 83,000,000

barrels per day. (2007)

 Consumption of Pakistan: 324,000mb/d =

0.41% of world (2007)
Sector-wise Energy
Consumption (2006)
 World Gas Reserves
 Total Reserves: 172,800,000,000,000 cu.m (2005)

 Pakistan: 759,700,000,000 cu.m=0.45% of world

(2005)
 World’s Gas supply and
consumption (2004)
 Total world supply : 234 billion cu. Ft
per day.

Pakistan: 2.4 bcfd = 1.0% of world

 Total world Consumption: 232 billion

cu ft.per day

Pakistan: 2.2 bcfd = 0.94% of world

Pakistan’s Gas Consumption
Pattern.(2006)
Industries
(excluding
fertilizer)
17% Commercial
23%

Fertilizer
15%

Domestic
15%

Transport
Power 4%
26%
Pakistan Oil & Gas
Resources
and Infrastructure
 Oil and Gas Development
Company Limited (OGDCL)
 Established in 1961

 October 1997 OGDC was converted into a public limited

company

 The largest petroleum exploration and production (E&P)

company in the Pakistan oil and gas sector

 OGDCL’s major oil and gas fields are located at Chanda,

Thora, Pasakhi, Chak Nurang, Fimkasar, Nandpur
Panjpir, Uch, Daru, Tando Alam, Sono, Lashari, Dakhni,
Sadkal, Rajian, Missa Kiswal, Pirkoh, Kunnar, Bobi,
Toot, Kal, Dhodak, Missan, Loti, Mela, Qadirpur

 As of September 2007, OGDCL so far has drilled 252

exploratory and 264 development wells. On the basis of
its activities since inception, has until September 2007,
made 77 discoveries with a success ratio of 1:3.
 Sui Northern Gas Pipeline
Limited
 Incorporated as a private limited company in
1963 and converted into a public limited
company in January 1964
 SNGPL transmission system extends from Sui in
Balochistan to Peshawar in (NWFP).
 07-08 plans to invest 11,376 million on
transmission and distribution projects
Sui Southern Gas Company
 Formed in 1954
 Sui Southern Gas Company
transmission system extends from
Sui, Balochistan to Karachi, Sindh
 07-08 plans to invest 10,384 million
on transmission and distribution
projects
 Exploration of Oil & Gas
(2006)
 First exploration well - 1866
 First oil discovery - 1915
 Total exploratory wells drilled - 653
 Total discoveries - 185
 Success rate - 1 : 3.5
 Sedimentary basin area - 827,268 sq km
 Oil & Gas Reserves (2003-
04)
Oil Natural Gas
(Million (Trillion
barrels) cubic feet)
 Discovered 737 38
 Produced 441 14
 Remaining 296 24
Supply & Demand of Oil (2003-
04)
 Demand 19mt/y
 Supply
Local Products 8.7mt/y
Imported Products 10 mt/y
Imported Crude 143,683 b/d
($ 1.362m)
Annual Import Bill $ 3,326m
Oil Refining Capacities
 Oil Refining Capacities
(Million Tonnes
per Year)


Existing Under Installation
 ARL 1.70 Bosicor 1.5
 PRL2.20
 NRL 2.70 Proposed
 Dhodak 0.12 Iran Pak 6.0
 PARCO 4.50

 Total: 11.22
Pakistan Existing Refining
Capacities
Oil Marketing Companies
0.1
1
PSO
0.8
SPL
3.9 7.5
0.06 COPL
6.3 APL
TPPL
17.2 63.1 PP
AGPL
HSPL
AOSPL
 Pakistan Natural Gas
Network
(Km)

Northern Southern
System System Total

Transmission Lines 5,000 3,000 8,000

Distribution Lines 32,000 21,000 53,000
No. of consumers 2.0 m 1.6 m 3.6 m

Final Gas Consumed 984 1,020 2,004

(MMCFD)
Causes For Increase in Oil
Price
 Causes For Increase in Oil
Price
 Labor strikes
 Hurricane threats to oil platforms
 Terrorist threats at refineries
 Wars in Middle East
 Speculation on the oil market
 Natural Hazards
 Weaker Dollar in comparison with Euro
 Today’s Global and Domestic
Prices
GLOBAL:-
 Crude Oil 86.33 dollars a barrel

 Gasoline $ 3/gallon (US) & $7/gallon(rest)

Domestic:-
 Petrol Rs 53.70 per litre

 Diesel Rs 32.57 per litre

 CNG Rs 35.31 per Kg

A Road Map to an Efficient
Oil & Gas Sector
 Road Map to an Efficient
Oil & Gas Sector

 Liberalize Oil & Gas Sector

 Privatize Public Sector Entities
 Accelerate Gas Development
 Improve Governance
 Promote Foreign Investment
 Improve Environment
 A. Liberalize Oil & Gas
Sector
 Shift from cost-plus to competitive regime.
 Full commercial and operational authority to Board of
Directors of public sector entities.
 Deregulation of petroleum prices, discontinuation of
the freight pool, review of marketing and dealer
margins, etc.
Cont.
 A. Liberalize Oil & Gas Sector
(Contd.)

 Review pricing and taxation of oil and

gas to allow consumers to benefit from
reductions in international prices and
to adjust to higher prices.
 Liberalize oil imports.
 Rationalize gas retail pricing, link
consumer price with substitute fuels.
 B. Privatize Public Sector
Entities

 Disinvest GOP / public sector

shareholding in discovered fields and
companies.
Privatize
 PPL
 OGDCL

 PSO

 NRL
 C. Accelerate Gas
Development
 Fast-track exploration and
exploitation of domestic natural gas
resources .
 Increase domestic supply of LPG from
refineries and fields .
 Import natural gas through pipeline
from neighboring countries and LPG
through a new import terminal.
 C. Gas Imports

 Gas Imports: Replacement of imported oil with

imported gas will increase energy security both
in terms of security of supply as well as security
of price.
 The recent proposal from Qatar to bring gas
exclusively to Pakistan, as well as the Iranian
proposal which considers India as an essential
component, could be considered.
 C. Benefits of Gas Import
 The import of natural gas will provide multi-directional
benefits to Pakistan as well as the South Asia region:

 Benefits to Pakistan:
• Substitution of imported liquid fuels (fuel oil and
kerosene oil), saving foreign exchange and the
environment.
• Relief to the hard-pressed infrastructure of ports,
roads and railways used in movement of imported oil
upcountry.
• Political advantage as a transit country.
 C. Benefits of Gas Import
(cont.)
 Advantages to Region:

 Shift towards gas-driven environment friendly energy

economies.

 Strengthen regional cooperation and provide a foundation for future

economic growth throughout the region.

 Significant direct and indirect economic benefits during the

construction and over the life of the project through
employment, transit fees, availability of clean fuel, economic
and industrial growth.

 New business and investment opportunities.

C. POTENTIAL GAS IMPORT SOURCE COUNTRIES
(2003-04)
Iran

 Proven Reserves - 812 TCF

Production -1900 BCF
Export -

Turkmenistan

 Proven Reserves -101 TCF

Production -790 BCF
Export - 590 BCF

Qatar

 Proven Reserves - 300 TCF

Production - 690 BCF
Export -168 BCF
 Issues in Pipeline Gas
 Transit terms.
 Security of supplies.
 Need for multilateral framework for
addressing critical issues.
 Regional geopolitical sensitivities.
 Global politics need to be addressed.
 D. Improve Governance
 OGRA (Oil Gas Regularity Authority),
established.
 HOLDCO operational.
 Department of Petroleum and Energy
Resources being restructured to
perform policy formulation and
coordination functions.
 E. Promote Foreign
Investment
 Investor friendly “Petroleum Exploration and
Production Policy 2001” announced in May
2001
 Investment of US$ 978 million has been committed
since October 1999 which includes:
 Exploration US$ 73 million
 Gas Fields Development US$ 505 million
 Oil Pipelines US$ 278 million
 Marketing US$ 55 million
 Local Investment US$ 67 million
 F. Improve Environment
 Increasing natural gas use to replace
fuel oil in power generation, and
petrol/diesel in transport by CNG
 Doubling the availability of LPG
 Improving petrol and diesel oil
specifications
Some Options for
Pakistan’s
Energy Sector
 Oil & Gas

 Total potential estimated at about 27 billion

barrels of oil and 282 trillion cubic feet of
gas.
 Only 737 million barrels of oil and 38 trillion
cubic feet of gas have so far been
discovered.
 Major future discoveries of oil and gas will
come from the offshore, Balochistan and
Dumber Block of Kirthar.
 Shift to Gas

A shift to gas is the least cost and

preferred option for:
 Economic Benefits
 Security of Energy Supplies
 Societal Equity
 Environmental Improvement
 Strategic Regional Cooperation
 Compressed Natural Gas
(CNG)
 After successful introduction of
natural gas as transport fuel to
replace petrol, policy actions are
being formulated to promote large
scale replacement of diesel oil by
CNG.
 Coal (2006-07)

 Thar field is the 5th largest (185 billion

tonnes) coal field in the world but has
remained un-exploited.
 Current production of coal 4.9 million
tonnes per year, constituting less than 5%
of our present energy mix.
 Coal must come into immediate focus for
power generation, and industrial,
commercial and domestic use.
COAL CONSUMPTION PATTERN OF PAKISTAN

Cement
20%

Power
4%
BrickKilns
53%

Coke
23%
Coal Reserves & Production
In Million
Tonnes

 Province Reserves Annual

Production

Sindh 184,123 0.978

Punjab 256 0.400
Balochistan 196 1.673
NWFP 81 0.041
-----------------------------------------------
Total: 184,656 3.092
 Strategy to Increase Coal
Use
 Policy Statement:
- Share of indigenous coal in energy mix at
national level to be enhanced from present
4.5% to 20%
Long Term Measures:
- Secure private investment for exploitation
of Thar.
- Feasibility studies to establish coal based
thermal power plant
(Contd..)
 Immediate Measures:
- Conversion of processing industry on coal
through policy incentives.
- Study utilization of coal for town gas.
- Study in-situ gasification of Thar coal fields.
- Preparation of mining feasibility study on
Thar coal.
 - Provincial Government to develop
infrastructure in coal fields .
 Enviromental Issues:
 Damages to the environment, can either be knowingly or
unintentionally.

 Directly effect on human life in the region.

 Oil’s spill over effect.

 Air emission.
 Enviromental Issues:
(contd.)
 Liquid waste.

 Soil contamination.

 Extinction of plants and species.

The End