Pakistan's huge offshore gas discovery to last 30 years, officials say

Irtiza Syed, CEO of Exxon Mobil is briefing Ghulam Sarwar Khan, Federal Minister for Petroleum about the progress on offshore drilling. Stephen, Vice President of Exxon Mobil is also present in the meeting held in Islamabad. (Photo courtesy: Ministry of Petroleum and Natural Resources)
Updated 16 January 2019

Pakistan's huge offshore gas discovery to last 30 years, officials say

  • Exploration activities to be part of a joint venture involving Italian and American companies
  • Initiative could lead to excavation of 25-40% of country's total gas reserves

KARACHI: With the commencement of offshore drilling activities to explore gas reserves in the Indus delta, Pakistan hopes to receive "good news" between March and April with the discovery of oil or gas that could meet the country's requirements for the next 30 years, officials said on Wednesday.

"The discovery is anticipated to yield gas flows which can be as big as the Sui field, with estimated reserves of three to eight trillion cubic feet (TCF), or 25 to 40 percent of Pakistan’s total gas reserves," an official statement issued after a meeting between Petroleum Minister Ghulam Sarwar Khan, Irtiza Syed, CEO, and Stephen  Morrell, Vice President of Exxon Mobil, in Islamabad on Wednesday, read.

Located in the Balochistan province of Pakistan, the Sui gas field was discovered in 1952 and had seven to eight trillion cubic feet of gas. At present, the daily average production is 394 mmcfd of gas and 24 barrels of oil. Despite diminishing reserves over time, the Sui gas field still remains one of the largest natural gas producing fields in Pakistan, according to Pakistan Petroleum Limited (PPL).

Syed briefed the minister about progress at the Indus G-Block where Exxon Mobil, along with other partners, has started spuding. The well’s diameter is 18 to 24 inches -- progress upto a depth of 1,900 feet has been made.

This endeavor is a joint venture formed by ENI (an Italian exploration company working in Pakistan since 2000), Exxon Mobil (an American company that has returned to Pakistan after 27 years), Oil and Gas Development Company OGDCL, and PPL to spud the Kekra-I exploration well in the Indus G-Block.

"It will give its first good news in March or April. Exxon Mobil has given the target depth of 5,500 feet. In March, the company hopes to send a specimen to Houston for examination. Similarly, ENI will send the specimen to Milan in March. From April to May there will be a reasonable idea that this well contains oil or gas", the statement added.

ENI, which is the operator of the block, has chartered, Saipem -- a rig ship to drill the exploration well which is located 230 kms to the southwest of Karachi. It began the process late last Friday. "The exploration cost is estimated at $75 million," statement added.

If successful, the discovery could yield reserves that could last for the next 25 to 30 years. "2019 will be a good year for all of us," Ghulam Sarwar Khan, who invited Exxon Mobil for onshore exploration, said

Currently, more than 200 people are working on the ship. Once the exploration activities are completed, it can generate a lot of employment opportunities, with Exxon Mobil expected to explore more wells at a later stage.

The petroleum minister, for his part, assured that the government would introduce measures to facilitate international investment. For this purpose, several duties and taxes have been waived off on the import of drilling equipment.

Analysts expect that with the discoveries, the avaibility of hydrocarbon will take at least three years.

"By or before April 2019, the companies will be in a position to assess the potential hydrocarbon flows from this offshore drilling along with their economic viability. Setting up the necessary infrastructure to make hydrocarbon flows commercially available can take three-five years as per channel checks," a research report by Topline Securities said.

Offshore success can be a real 'game changer' for Pakistan's exploration and production activities as the Indus G-Block falls under the ‘Ultradeep’ Zone-0 price mechanism.

"We estimate that at Arab Light Crude $60/bbl, the gas from Indus-G will be priced at $7.2/mmbtu with additional $1/mmbtu as an incentive for first three discoveries in offshore area, as per the Petroleum Policy of 2012. The zone is competitively priced, offering a premium of 80 percent, in comparison to the average applicable pricing on onshore blocks under older policies," the statement added.


Pakistan to be part of new Saudi foreign manpower program 

Updated 14 November 2019

Pakistan to be part of new Saudi foreign manpower program 

  • New skills-based system to be launched from next month
  • Will include India, Philippines, Sri Lanka, Indonesia, Egypt, Bangladesh, and Pakistan

ISLAMABAD: Starting next month, Saudi Arabia will introduce a new skilled foreign manpower program that will eventually include Pakistan, a senior official at the Saudi labor ministry said this week. 

Nayef Al-Omair, head of the vocational examination program at the Ministry of Labor, said on Tuesday in Riyadh that the ministry was categorizing the tasks and the structure of some professions for visa-issuing purposes.

Under the new policy, visas would be issued only after skill tests and the previous system would be gradually phased out. 

The new scheme would be optional for one year starting December 2019 after which it would become compulsory, Al-Omair said. The new program would first be applied to manpower recruited from India due to its large size in the Saudi market.

Eventually, the program will cover seven countries, including India, the Philippines, Sri Lanka, Indonesia, Egypt, Bangladesh, and Pakistan. Workers belonging to these states constitute 95 percent of professional manpower in the Kingdom’s local market.

Saudi Arabia is home to around 2.6 million Pakistani expats those have been a vital source of foreign remittances.

Last year the country received $21.8 billion in remittances out of which $5 billion were remitted by Pakistani nationals working in Kingdom.

According to the Pakistani ministry of finance, there was a major decline in manpower export to Saudi Arabia where only 100,910 emigrants proceeded for employment in 2018 as compared to 2017, a drop of 42,453 emigrants.

However, Sayed Zulfikar Bukhari, special assistant to the Pakistani prime minister on overseas Pakistanis, said in an interview earlier this month that Saudi Arabia had agreed to increase the share of the Pakistani labor force in the multi-billion dollar New Taif City development.

Pakistan and Saudi Arabia have formed working groups to develop procedures for this transfer of manpower. Pakistani groups will visit the Kingdom in the coming months to finalize arrangements.