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MarketScreener Homepage  >  Equities  >  KARACHI STOCK EXCHANGE (GUARANTEE) LIMITED, THE  >  Pak PetroleumXDXB    PPL   PK0081801018

PAK PETROLEUMXDXB

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Pakistan Petroleum : Hope of finding oil and gas in Arabian Sea in Pakistan dashed

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05/19/2019 | 06:28am EDT

Pakistan's hope of finding massive oil and gas reserves dashed as exploration mission off the coast of Karachi was abandoned after the drill hit the dry 'wells'. Photo for illustration purpose only Image Credit: Pixabay

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Exploration mission has been stopped off the coast of Karachi as the drillers hit the dry ‘wells’ despite drilling more than 5500 metres deep into the sea.

It was officially announced on Saturday that the much-celebrated offshore drilling in Kekra-1 had been stopped because no reserves were found. The operators of the well have decided to plug it in the coming days, according to reports in Pakistani media.

Around 18 attempts have been made in the past, but all remained unsuccessful despite encouraging data from each drilling, says the official.

"We have only drilled 18 holes for oil. Only the 18th attempt. India had offshore discoveries after 43rd attempt, Libya after 58th, and Norway, another country which nobody believed could have reserves, drilled 78 holes between 1954 to 1963 and then hit it big," Syed Ali Haider Zaidi, Federal Minister for Maritime Affairs, told Gulf News. He said that hope and resilience is the way forward as the government would continue to look for alternate resources.

Talking to a private news channel, Special Assistant to the Prime Minister on Petroleum Nadeem Babar announced that the offshore drilling in Kekra-1 did not yield desired results.

Pakistanis were exceptionally hopeful about finding large oil and gas reserves in the country’s territorial waters in the Arabian Sea. Kekra-1 well at Indus G-Block is located around 280 kilometres southwest of Karachi coast near Iran.

The bad news of failure to discover the oil and gas reserves came as a big blow to Prime Minister Imran Khan’s government which has pinned great expectation on oil discovery and had already celebrated its expected discovery.

In March this year, Prime Minister Imran had said Pakistan would not need to import oil after reserves were found near Karachi coast.

"We are hopeful of finding large reserves of gas and oil in the sea near Karachi. The nation should pray for this and I will soon share good news regarding this," Khan had told reporters in Islamabad. God willing the reserves will be so large that we will not need to import any oil," Imran had said in an earlier statement.

Imran’s government has been facing tough economic situation since he came into power in August last year.

The Pakistan rupee has dipped so much in the last few days that it has been termed as the worst-performing currency in Asia.

The rupee continued to fall to record lows, after the government agreed in principle to a $6 billion loan from the International Monetary Fund (IMF).

The rupee, which lost 3.6 per cent on Thursday to close at 146.2 against the US dollar in the interbank market, dipped further on Friday selling at Rs149.50 in the interbank market and Rs150 in the open market.

Analysts predict that the worst is not yet over. The rupee is expected to go through another bout of devaluation in the coming days when Pakistan gets the first credit tranche of the IMF loan.

Speaking to Geo News, Babar said the process of drilling up to more than 5500 meters was completed on Kekra-1 (Indus G-Block) off Karachi coast.

He said Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL) also assisted Exxon Mobil and ENI in drilling the oil well.

He further informed that the cost of drilling project, which has now been abandoned, remained over $100 million.

At the same time, the officials say, oil and gas E&P is described as a ‘high risk- high reward’ business and the failures should not be taken as a loss. “India found offshore reserves from its ‘Bombay High well’ after 40 attempts,” they add.

The drilling was initiated around four months back by ENI, an Italian oil and gas exploration and production (E&P) giant, which is the operator of Kekra-1.

The other four partners of the well were ExxonMobil of the US — one of the world’s largest oil and gas firms — Pakistan Petroleum Limited and the Oil and Gas Development Company Limited (OGDCL).

According to data of a recent study, existing deposits in Pakistan will further deplete 60 per cent by the year 2027. It underlined the need to step up exploration in potential areas on a war-footing.

Pakistan currently meets only 15 per cent of its domestic petroleum needs with crude oil production of around 22 million tons; the other 85 per cent is met through imports.

The country is facing a huge current account deficit of up to $18 billion and is spending a substantial amount of foreign exchange reserves on import of oil.

(c) Al Nisr Publishing LLC 2019. All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info)., source Middle East & North African Newspapers

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Yield 2020 6,56%
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