Petroleum division aligns strategy to achieve autarky in oil, gas sector

ISLAMABAD-Making a true calculation of the country’s existing and future energy needs, the Petroleum division has aligned its strategy to achieve self-sufficiency in oil and gas sector by introducing ease-of-doing-business and radical measures to ensure a level-playing field for all competitors. 

“As many as 40 new blocks have been identified in different parts of the country to step up oil and gas exploration activities as the existing reservoirs are fast-depleting and since long there is no major discovery,” a senior official privy to petroleum sector developments told APP while sharing two-year performance of the Pakistan Tehreek-e-Insaf (PTI) government. 

The new blocks would be awarded in a transparent manner through an international bidding, for which necessary work was in process, he said. In September 2018, he said, following the PTI government’s coming into power, a bidding round of 10 onshore exploration blocks was conducted, which was held after a gap of almost five years, wherein eight blocks were awarded. 

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“Next bidding round is being planned shortly whereby 20 Onshore Blocks would be offered and efforts are being made to attract foreign companies,” he said, adding that more such rounds would be held in sequence. The country’s total sedimentary area was around 827,268 square kilometers, out of which 320, 741 KM or 39 per cent of the area was under exploration, he said. 

Quoting a recent study about fast depletion of existing hydrocarbon reservoirs in the country, he feared that the deposits would further deplete by 60 per cent by the year 2027, underlining the need for accelerating exploration activities in potential areas on war-footing.

Total consumption of petroleum products in the country stood at 19.68 Million Tons (MTs) during the fiscal year 2019-20, out of which 11.59 MTs was achieved through local refineries and 8.09 MT through import. While, there was a gap of over 2 Billion Cubic Feet per Day (BCFD) gas between production and demand of the commodity to meet requirements of more than 9.6 million consumers across the country, current gas production is around 4 BCFD against the demand of 6 BCFD, the gap is being bridged through import of LNG and LPG. 

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The official said the Petroleum division had granted open access to private sector in import of Liquefied Natural Gas (LNG) besides allowing them to set up their own terminals. He said the government had planned to introduce Euro-V fuel in the country to meet requirements of the hi-tech vehicles and tackle the environmental issues like pollution and smog factors. 

He said general sales tax on fuels had been fixed at the rate of 17 per cent by law to streamline the matters related to pricing of petroleum products. Commenting on the country’s oil refining capacity, he said two new modern refineries were being built, while an incentive package had been announced for up-gradation of existing facilities. 

He said the government had also simplified the approval process for those who wanted to work in exploration and production business. The official said the government had finalized new downstream oil policy, whereas the work on dualization of the white oil pipeline would start soon. Besides, he said, engineering work was being carried out for development of underground storage capacity. 

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Boards of Directors of ten companies reconstituted, he said, adding professional CEOs had been appointed in Pakistan State Oil Company Limited, Oil and Gas Development Company Limited Pakistan Mineral Development Corporation and Government Holdings (Private) Limited.

Article source: https://nation.com.pk/09-Aug-2020/petroleum-division-aligns-strategy-to-achieve-autarky-in-oil-gas-sector