Pakistan issues new licenses for oil exploration in Sindh, Balochistan provinces

Ministry of Petroleum signs agreements to issue new licenses for oil exploration in Pakistan’s Sindh and Balochistan provinces on June 20, 2019. (PID)

• Petroleum minister says new deals part of government's reform agenda, efforts to attract petroleum investment
• Pakistan has been under mounting pressure to shore up its creaking energy infrastructure

ISLAMABAD: Pakistan on Thursday signed agreements to issue new licenses for oil exploration in the country, the ministry of petroleum said, with the projects aimed at attracting investment and meeting growing energy requirements.
“Government of Pakistan today [Thursday] executed Petroleum Concessions (PCAs) and Exploration Licences (ELs) of critical Blocks in the provinces of Sindh and Balochistan,” the ministry of petroleum said in a statement. 
The statement quoted Omar Ayub Khan, Federal Minister for Petroleum, as saying the agreements, signed in Islamabad, were part of the incumbent government’s reform agenda and efforts to attract investment in the petroleum sector. 
The exploration blocks are located in the province of Sindh and Balochistan and involve the Oil and Gas Development Company and Pakistan Petroleum Limited. 
“The minimum firm work commitment for these blocks is US $ 13.61 million for a period of three years,” the statement said. “The companies entering into agreements today [Thursday] would be obligated to spend a minimum of US $ 30,000/year in each block.”
Last month, the consortium exploring the Kekra-1 well off the coast of Pakistan ended drilling operations after no reserves of oil and gas were found, said a spokesman for Oil and Gas Development Co. Ltd, one of the Pakistani partners, along with Italy’s ENI SpA and Exxon Mobile Corp.
News that the project was abandoned came as a blow to the government of Prime Minister Imran Khan which had pinned high hopes on offshore oil and gas discoveries to help with both the country’s chronic energy deficiencies and its ballooning trade deficit.
Pakistan is believed to have rich mineral resources, with conventional gas reserves estimated at 20 trillion cubic feet (tcf), or 560 billion cubic meters, and shale gas reserves, which are so far untouched, at more than 100 tcf.
The government is planning to offer dozens of new gas field concessions, hoping that improved security in recent years will reassure foreign investors who have been deterred in the past by the threat of militant violence.
Pakistan has been under mounting pressure to shore up its creaking energy infrastructure, both to provide more reliable supplies of oil and gas to its growing population of more than 200 million and to cut reliance on expensive foreign imports.
The country recently signed an accord for a $6 billion loan from the International Monetary Fund that helped send its rupee currency to an all time low and highlighted the need to cut import bills.