Pakistan seeks investment from Saudi, UAE for oil and gas exploration

A general view shows the Saudi Aramco oil facility in Dammam city, 450 kms east of the Saudi capital Riyadh on Nov. 23, 2007. (AFP/File)
Updated 21 September 2019

Pakistan seeks investment from Saudi, UAE for oil and gas exploration

  • Government plans to market ten new exploration blocks to Middle Eastern companies in November
  • The country’s demand for energy is increasing at the rate of eight percent per year, experts say

ISLAMABAD: Pakistan government is hoping to get investment from Saudi Arabia, the United Arab Emirates and other Gulf countries at an upcoming bidding process of new petroleum exploration licenses, said the ministry of energy’s petroleum division on Saturday, adding that the exercise will reduce the country’s energy import bill, boost its foreign exchange reserves and bolster the ailing economy.
“We will be attending ADIPEC [Abu Dhabi International Petroleum Exhibition and Conference] in November to market our ten new exploration blocks for Middle Eastern companies, especially Saudi Arabia and the UAE,” Sher Afgan Khan, additional-secretary (policy) at the ministry, told Arab News in an interview.
The country is planning to award ten new oil and gas exploration licenses out of 30 blocks in December this year to attract foreign investment amounting to about $150 million. “Our explored oil and gas reserves are depleting fast,” he added. “Therefore, we need new exploration urgently to cut our energy import bill.”
Pakistan meets about 80 percent of its energy requirements through international buying. Its energy demand has also been increasing by 8 percent a year while its oil imports constitute nearly a quarter of its total import bill, according to the Pakistan Bureau of Statistics.
The South Asian nation has indigenous gas production of four billion cubic feet per day, and its crude oil production stands at about 95,000 barrels per day which only meets about 15 percent of the country’s overall demand.
“In the last five years, we couldn’t award even a single exploration license to a foreign company due to security reasons,” Khan said. “But now there is no issue of law and order, and we are hopeful that the next bidding round for the award of new exploration licenses will attract the interest of new foreign players.”
He informed that his ministry had demarcated a total of 40 oil exploration blocks, out of which ten would be awarded by the end of the year and the remaining 30 would be auctioned in the next year and a half.
Pakistan was offering “the best prices” to the oil and gas exploration companies in the region, he said, adding that the country had total sedimentary deposits of 827,000 square kilometers while the area under exploration was 361,000 square kilometers.
Khan also maintained that about 1,100 exploratory wells had been drilled in the country to this day.
A delegation of the Ministry of Energy, led by Special Assistant to Prime Minister on Petroleum Nadeem Babar, is currently visiting the United States and Canada to market and promote the oil and gas exploration opportunities in Pakistan.
“During our interaction with US and Canadian companies, Pakistan’s perspective was shared and it was emphasized that Pakistan was liberalizing the gas sector and offering numerous tax incentives to attract foreign investment,” the secretary added.


Oil prices rise as faith in supply cuts grows

Updated 26 May 2020

Oil prices rise as faith in supply cuts grows

  • Producers are following through on commitments to cut supplies as fuel demand picks up with coronavirus restrictions easing
  • OPEC+ countries are due to meet again in early June to discuss maintaining their supply cuts to shore up prices

NEW YORK: Oil prices rose on Tuesday, supported by growing confidence that producers are following through on commitments to cut supplies and as fuel demand picks up with coronavirus restrictions easing.
Brent crude futures were up 45 cents, or 1.3%, at $35.98 a barrel by 1:09 p.m. EDT (1709 GMT). US West Texas Intermediate (WTI) crude futures gained 89 cents, or 2.7%, to $34.14.
The Organization of the Petroleum Exporting Countries and other leading oil producers including Russia, a group known as OPEC+, agreed last month to cut their combined output by almost 10 million barrels per day in May-June to shore up prices and demand, which has been hit by the coronavirus pandemic.
Russian Energy Minister Alexander Novak is due to meet oil major producers on Tuesday to discuss the possible extension of the current level of cuts beyond June, sources familiar with the plans told Reuters.
The RIA news agency said Russian oil production volumes were near the country’s target of 8.5 million bpd for May and June.
On Monday, Russia’s energy ministry quoted Novak as saying that a rise in fuel demand should help to cut a global surplus of about 7 million to 12 million bpd by June or July.
OPEC+ countries are due to meet again in early June to discuss maintaining their supply cuts to shore up prices, which are still down about 45% since the start of the year.
“The 16 million bpd oversupply in crude during April could be reversed altogether by June, helped by a 4 million-bpd recovery in crude demand and a 12 million-bpd cut in crude supply,” said Bjornar Tonhaugen, head of oil markets for Rystad Energy.
“OPEC+ is pulling the most weight by far, effectively reducing supply by nearly 9 million bpd while non-OPEC+ crude supply is down by more than 3.5 million bpd from March levels.”
In an indication of lower supply in the future, data from energy services business Baker Hughes showed that the US rig count hit a record low of 318 last week.