ISLAMABAD: The government executed the Petroleum Concession Agreements (PCAs) and Exploration Licences (ELs) on Wednesday for eight blocks with Pakistani Exploration and Production (E&P) companies committed to investing over $33 million in the next three years.
The signing ceremony took place at the Prime Minister’s Secretariat, encompassing agreements for Kotra East (2867-8), Murradi (2767-7), Sehwan (2667-19) and Zindan-II (3271-9) with the Oil & Gas Development Company Limited (OGDCL), Multanai (3168-3) with Pakistan Oilfields Limited (POL), Sawan South (2668-26) with the United Energy Pakistan Limited (UEP), Chinese Exploration & Production Company, Gambat-II (2668-25) with a joint venture of the Pakistan Petroleum Limited (Operator) and OGDCL and Saruna West (2666-1) with joint venture of POL (Operator), PPL and OGDCL.
Muhammad Ali, Minister for Power and Petroleum, said these efforts would result in additional hydrocarbon reserves for the country in the coming years. He highlighted that the execution of Exploration Licences and PCAs would not only stimulate investment in the petroleum sector but also address the energy demand and supply gap.
The E&P companies engaged in prospecting in these blocks are mandated to make a minimum investment of over $33.3 million in three years. For blocks with discoveries, these companies will invest several hundred million dollars in production development. Additionally, the companies are obligated to spend a minimum of $30,000 per year in each block on social welfare schemes in their respective areas.
Notably, Pakistan’s annual depletion rate is exceeding 10 per cent in gas reserves. Current supplies from the Sui Southern Gas Limited (SSGC) have decreased by 90 MMCFD compared to the previous year.
On December 29, 2023, a top official of the Petroleum Division had told the Senate Standing Committee on Petroleum that in the recent bidding of the concessions, not a single foreign company participated in the auction of local oil and gas exploration blocks. The OGDCL official informed the committee that by 2027, work on various gas blocks would be completed, with 2-D and 3-D studies already concluded for 21 gas blocks.
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