Oil & Gas Industry
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“Oil & Gas Sector of Pakistan “ Presenters : Adil Sethi Kamil Iqbal
Agenda
Pakistan Primary Energy Mix Global and Regional Comparison Pakistan Oil & Gas Resources and Infrastructure Causes For Increase in Oil Price Today’s Global and Domestic Prices A Road Map to an Efficient Oil & Gas Sector Some Options for Pakistan’s Energy Sector
Pakistan Primary Energy Mix FY-07 Consumption: 58 Million TOE • • • • • •
Oil : Gas : Hydro: Coal: Nuclear:
28.4 % 50.4 % 12.7 % 7.0 % 1.0 %
Pakistan Primary Energy Mix YR-2006
Global and Regional Comparison.
World Oil Reserves
Total world oil reserves are approximately 1,081 to 1,317 billion barrels (2007)
Pakistan: 358,900,000 barrels = 0.03% of world (2007)
World Oil Supply
Total world’s supply 75 million barrels/day (2005)
Pakistan: 63,000 Barrels per day i.e 0.063 mb/d. Which is 0.08% of world. (2005)
Oil Consumption
Total Consumption of world : 83,000,000 barrels per day. (2007)
Consumption of Pakistan: 324,000mb/d = 0.41% of world (2007)
Sector-wise Energy Consumption (2006)
World Gas Reserves
Total Reserves: 172,800,000,000,000 cu.m (2005)
Pakistan: 759,700,000,000 cu.m=0.45% of world (2005)
World’s Gas supply and consumption (2004)
Total world supply : 234 billion cu. Ft per day. Pakistan: 2.4 bcfd = 1.0% of world
Total world Consumption: 232 billion cu ft.per day Pakistan: 2.2 bcfd = 0.94% of world
Pakistan’s Gas Consumption Pattern.(2006) Industries (excluding fertilizer) 17%
Commercial 23%
Fertilizer 15% Domestic 15%
Power 26%
Transport 4%
Pakistan Oil & Gas Resources and Infrastructure
Oil and Gas Development Company Limited (OGDCL)
Established in 1961
October 1997 OGDC was converted into a public limited company
The largest petroleum exploration and production (E&P) company in the Pakistan oil and gas sector
OGDCL’s major oil and gas fields are located at Chanda, Thora, Pasakhi, Chak Nurang, Fimkasar, Nandpur Panjpir, Uch, Daru, Tando Alam, Sono, Lashari, Dakhni, Sadkal, Rajian, Missa Kiswal, Pirkoh, Kunnar, Bobi, Toot, Kal, Dhodak, Missan, Loti, Mela, Qadirpur
As of September 2007, OGDCL so far has drilled 252 exploratory and 264 development wells. On the basis of its activities since inception, has until September 2007, made 77 discoveries with a success ratio of 1:3.
Sui Northern Gas Pipeline Limited
Incorporated as a private limited company in 1963 and converted into a public limited company in January 1964 SNGPL transmission system extends from Sui in Balochistan to Peshawar in (NWFP). 07-08 plans to invest 11,376 million on transmission and distribution projects
Sui Southern Gas Company
Formed in 1954 Sui Southern Gas Company transmission system extends from Sui, Balochistan to Karachi, Sindh 07-08 plans to invest 10,384 million on transmission and distribution projects
Exploration of Oil & Gas (2006)
First exploration well 1866 First oil discovery 1915 Total exploratory wells drilled 653 Total discoveries 185 Success rate - 1 : 3.5 Sedimentary basin area 827,268 sq km
Oil & Gas Reserves (200304)
Discovered Produced Remaining
Oil (Million barrels) 737 441 296
Natural Gas (Trillion cubic feet) 38 14 24
Supply & Demand of Oil (200304)
Demand Supply Local Products Imported Products Imported Crude Annual Import Bill
19mt/y 8.7mt/y 10 mt/y 143,683 b/d ($ 1.362m) $ 3,326m
Oil Refining Capacities
Oil Refining Capacities (Million Tonnes
per Year)
Existing ARL PRL2.20 NRL Dhodak PARCO
Total:
Under Installation 1.5
1.70
Bosicor
2.70 0.12 4.50
Proposed Iran Pak 6.0
11.22
Pakistan Existing Refining Capacities
Oil Marketing Companies 0.1 1
PSO
0.8 3.9 6.3
7.5
SPL COPL
0.06
APL TPPL
17.2
63.1
PP AGPL HSPL AOSPL
Pakistan Natural Gas Network
(Km)
Northern
Southern System
Transmission Lines Distribution Lines No. of consumers Final Gas Consumed (MMCFD)
System
Total
5,000 32,000 2.0 m
3,000 21,000 1.6 m
8,000 53,000 3.6 m
984
1,020
2,004
Causes For Increase in Oil Price
Causes For Increase in Oil Price
Labor strikes Hurricane threats to oil platforms Terrorist threats at refineries Wars in Middle East Speculation on the oil market Natural Hazards Weaker Dollar in comparison with Euro
Today’s Global and Domestic Prices GLOBAL: Crude Oil 86.33 dollars a barrel Gasoline $ 3/gallon (US) & $7/gallon(rest) Domestic: Petrol Rs 53.70 per litre Diesel Rs 32.57 per litre CNG Rs 35.31 per Kg
A Road Map to an Efficient Oil & Gas Sector
Road Map to an Efficient Oil & Gas Sector
Liberalize Oil & Gas Sector Privatize Public Sector Entities Accelerate Gas Development Improve Governance Promote Foreign Investment Improve Environment
A. Liberalize Oil & Gas Sector
Shift from cost-plus to competitive regime. Full commercial and operational authority to Board of Directors of public sector entities. Deregulation of petroleum prices, discontinuation of the freight pool, review of marketing and dealer margins, etc. Cont.
A. Liberalize Oil & Gas Sector (Contd.)
Review pricing and taxation of oil and gas to allow consumers to benefit from reductions in international prices and to adjust to higher prices. Liberalize oil imports. Rationalize gas retail pricing, link consumer price with substitute fuels.
B. Privatize Public Sector Entities
Disinvest GOP / public sector shareholding in discovered fields and companies. Privatize PPL OGDCL PSO NRL
C. Accelerate Gas Development
Fast-track exploration and exploitation of domestic natural gas resources . Increase domestic supply of LPG from refineries and fields . Import natural gas through pipeline from neighboring countries and LPG through a new import terminal.
C. Gas Imports
Gas Imports: Replacement of imported oil with imported gas will increase energy security both in terms of security of supply as well as security of price. The recent proposal from Qatar to bring gas exclusively to Pakistan, as well as the Iranian proposal which considers India as an essential component, could be considered.
C. Benefits of Gas Import
The import of natural gas will provide multi-directional benefits to Pakistan as well as the South Asia region:
Benefits to Pakistan: • Substitution of imported liquid fuels (fuel oil and kerosene oil), saving foreign exchange and the environment. • Relief to the hard-pressed infrastructure of ports, roads and railways used in movement of imported oil upcountry. • Political advantage as a transit country.
C. Benefits of Gas Import (cont.)
Advantages to Region:
Shift towards gas-driven environment friendly energy economies.
Strengthen regional cooperation and provide a foundation for future economic growth throughout the region.
Significant direct and indirect economic benefits during the construction and over the life of the project through employment, transit fees, availability of clean fuel, economic and industrial growth.
New business and investment opportunities.
C. POTENTIAL GAS IMPORT SOURCE COUNTRIES (2003-04) Iran
Proven Reserves - 812 TCF Production -1900 BCF Export Turkmenistan
Proven Reserves -101 TCF Production -790 BCF Export - 590 BCF Qatar
Proven Reserves - 300 TCF Production - 690 BCF Export -168 BCF
Issues in Pipeline Gas
Transit terms. Security of supplies. Need for multilateral framework for addressing critical issues. Regional geopolitical sensitivities. Global politics need to be addressed.
D. Improve Governance
OGRA (Oil Gas Regularity Authority), established. HOLDCO operational. Department of Petroleum and Energy Resources being restructured to perform policy formulation and coordination functions.
E. Promote Foreign Investment
Investor friendly “Petroleum Exploration and Production Policy 2001” announced in May 2001
Investment of US$ 978 million has been committed since October 1999 which includes: Exploration US$ 73 million Gas Fields Development US$ 505 million Oil Pipelines US$ 278 million Marketing US$ 55 million Local Investment US$ 67 million
F. Improve Environment
Increasing natural gas use to replace fuel oil in power generation, and petrol/diesel in transport by CNG Doubling the availability of LPG Improving petrol and diesel oil specifications
Some Options for Pakistan’s Energy Sector
Oil & Gas
Total potential estimated at about 27 billion barrels of oil and 282 trillion cubic feet of gas. Only 737 million barrels of oil and 38 trillion cubic feet of gas have so far been discovered. Major future discoveries of oil and gas will come from the offshore, Balochistan and Dumber Block of Kirthar.
Shift to Gas A shift to gas is the least cost and preferred option for:
Economic Benefits Security of Energy Supplies Societal Equity Environmental Improvement Strategic Regional Cooperation
Compressed Natural Gas (CNG)
After successful introduction of natural gas as transport fuel to replace petrol, policy actions are being formulated to promote large scale replacement of diesel oil by CNG.
Coal (2006-07)
Thar field is the 5th largest (185 billion tonnes) coal field in the world but has remained un-exploited. Current production of coal 4.9 million tonnes per year, constituting less than 5% of our present energy mix. Coal must come into immediate focus for power generation, and industrial, commercial and domestic use.
COAL CONSUMPTION PATTERN OF PAKISTAN Cement 20%
Power 4% BrickKilns 53% Coke 23%
Coal Reserves & Production In Million Tonnes
Province Production
Reserves
Annual
Sindh 184,123 0.978 Punjab 256 0.400 Balochistan 196 1.673 NWFP 81 0.041 ----------------------------------------------Total: 184,656 3.092
Strategy to Increase Coal Use
Policy Statement: - Share of indigenous coal in energy mix at national level to be enhanced from present 4.5% to 20% Long Term Measures: - Secure private investment for exploitation of Thar. - Feasibility studies to establish coal based thermal power plant (Contd..)
Immediate Measures: - Conversion of processing industry on coal through policy incentives. - Study utilization of coal for town gas. - Study in-situ gasification of Thar coal fields. - Preparation of mining feasibility study on Thar coal.
- Provincial Government to develop infrastructure in coal fields .
Enviromental Issues:
Damages to the environment, can either be knowingly or unintentionally.
Directly effect on human life in the region.
Oil’s spill over effect.
Air emission.
Enviromental Issues: (contd.)
Liquid waste.
Soil contamination.
Extinction of plants and species.
The End
Agenda
Pakistan Primary Energy Mix Global and Regional Comparison Pakistan Oil & Gas Resources and Infrastructure Causes For Increase in Oil Price Today’s Global and Domestic Prices A Road Map to an Efficient Oil & Gas Sector Some Options for Pakistan’s Energy Sector
Pakistan Primary Energy Mix FY-07 Consumption: 58 Million TOE • • • • • •
Oil : Gas : Hydro: Coal: Nuclear:
28.4 % 50.4 % 12.7 % 7.0 % 1.0 %
Pakistan Primary Energy Mix YR-2006
Global and Regional Comparison.
World Oil Reserves
Total world oil reserves are approximately 1,081 to 1,317 billion barrels (2007)
Pakistan: 358,900,000 barrels = 0.03% of world (2007)
World Oil Supply
Total world’s supply 75 million barrels/day (2005)
Pakistan: 63,000 Barrels per day i.e 0.063 mb/d. Which is 0.08% of world. (2005)
Oil Consumption
Total Consumption of world : 83,000,000 barrels per day. (2007)
Consumption of Pakistan: 324,000mb/d = 0.41% of world (2007)
Sector-wise Energy Consumption (2006)
World Gas Reserves
Total Reserves: 172,800,000,000,000 cu.m (2005)
Pakistan: 759,700,000,000 cu.m=0.45% of world (2005)
World’s Gas supply and consumption (2004)
Total world supply : 234 billion cu. Ft per day. Pakistan: 2.4 bcfd = 1.0% of world
Total world Consumption: 232 billion cu ft.per day Pakistan: 2.2 bcfd = 0.94% of world
Pakistan’s Gas Consumption Pattern.(2006) Industries (excluding fertilizer) 17%
Commercial 23%
Fertilizer 15% Domestic 15%
Power 26%
Transport 4%
Pakistan Oil & Gas Resources and Infrastructure
Oil and Gas Development Company Limited (OGDCL)
Established in 1961
October 1997 OGDC was converted into a public limited company
The largest petroleum exploration and production (E&P) company in the Pakistan oil and gas sector
OGDCL’s major oil and gas fields are located at Chanda, Thora, Pasakhi, Chak Nurang, Fimkasar, Nandpur Panjpir, Uch, Daru, Tando Alam, Sono, Lashari, Dakhni, Sadkal, Rajian, Missa Kiswal, Pirkoh, Kunnar, Bobi, Toot, Kal, Dhodak, Missan, Loti, Mela, Qadirpur
As of September 2007, OGDCL so far has drilled 252 exploratory and 264 development wells. On the basis of its activities since inception, has until September 2007, made 77 discoveries with a success ratio of 1:3.
Sui Northern Gas Pipeline Limited
Incorporated as a private limited company in 1963 and converted into a public limited company in January 1964 SNGPL transmission system extends from Sui in Balochistan to Peshawar in (NWFP). 07-08 plans to invest 11,376 million on transmission and distribution projects
Sui Southern Gas Company
Formed in 1954 Sui Southern Gas Company transmission system extends from Sui, Balochistan to Karachi, Sindh 07-08 plans to invest 10,384 million on transmission and distribution projects
Exploration of Oil & Gas (2006)
First exploration well 1866 First oil discovery 1915 Total exploratory wells drilled 653 Total discoveries 185 Success rate - 1 : 3.5 Sedimentary basin area 827,268 sq km
Oil & Gas Reserves (200304)
Discovered Produced Remaining
Oil (Million barrels) 737 441 296
Natural Gas (Trillion cubic feet) 38 14 24
Supply & Demand of Oil (200304)
Demand Supply Local Products Imported Products Imported Crude Annual Import Bill
19mt/y 8.7mt/y 10 mt/y 143,683 b/d ($ 1.362m) $ 3,326m
Oil Refining Capacities
Oil Refining Capacities (Million Tonnes
per Year)
Existing ARL PRL2.20 NRL Dhodak PARCO
Total:
Under Installation 1.5
1.70
Bosicor
2.70 0.12 4.50
Proposed Iran Pak 6.0
11.22
Pakistan Existing Refining Capacities
Oil Marketing Companies 0.1 1
PSO
0.8 3.9 6.3
7.5
SPL COPL
0.06
APL TPPL
17.2
63.1
PP AGPL HSPL AOSPL
Pakistan Natural Gas Network
(Km)
Northern
Southern System
Transmission Lines Distribution Lines No. of consumers Final Gas Consumed (MMCFD)
System
Total
5,000 32,000 2.0 m
3,000 21,000 1.6 m
8,000 53,000 3.6 m
984
1,020
2,004
Causes For Increase in Oil Price
Causes For Increase in Oil Price
Labor strikes Hurricane threats to oil platforms Terrorist threats at refineries Wars in Middle East Speculation on the oil market Natural Hazards Weaker Dollar in comparison with Euro
Today’s Global and Domestic Prices GLOBAL: Crude Oil 86.33 dollars a barrel Gasoline $ 3/gallon (US) & $7/gallon(rest) Domestic: Petrol Rs 53.70 per litre Diesel Rs 32.57 per litre CNG Rs 35.31 per Kg
A Road Map to an Efficient Oil & Gas Sector
Road Map to an Efficient Oil & Gas Sector
Liberalize Oil & Gas Sector Privatize Public Sector Entities Accelerate Gas Development Improve Governance Promote Foreign Investment Improve Environment
A. Liberalize Oil & Gas Sector
Shift from cost-plus to competitive regime. Full commercial and operational authority to Board of Directors of public sector entities. Deregulation of petroleum prices, discontinuation of the freight pool, review of marketing and dealer margins, etc. Cont.
A. Liberalize Oil & Gas Sector (Contd.)
Review pricing and taxation of oil and gas to allow consumers to benefit from reductions in international prices and to adjust to higher prices. Liberalize oil imports. Rationalize gas retail pricing, link consumer price with substitute fuels.
B. Privatize Public Sector Entities
Disinvest GOP / public sector shareholding in discovered fields and companies. Privatize PPL OGDCL PSO NRL
C. Accelerate Gas Development
Fast-track exploration and exploitation of domestic natural gas resources . Increase domestic supply of LPG from refineries and fields . Import natural gas through pipeline from neighboring countries and LPG through a new import terminal.
C. Gas Imports
Gas Imports: Replacement of imported oil with imported gas will increase energy security both in terms of security of supply as well as security of price. The recent proposal from Qatar to bring gas exclusively to Pakistan, as well as the Iranian proposal which considers India as an essential component, could be considered.
C. Benefits of Gas Import
The import of natural gas will provide multi-directional benefits to Pakistan as well as the South Asia region:
Benefits to Pakistan: • Substitution of imported liquid fuels (fuel oil and kerosene oil), saving foreign exchange and the environment. • Relief to the hard-pressed infrastructure of ports, roads and railways used in movement of imported oil upcountry. • Political advantage as a transit country.
C. Benefits of Gas Import (cont.)
Advantages to Region:
Shift towards gas-driven environment friendly energy economies.
Strengthen regional cooperation and provide a foundation for future economic growth throughout the region.
Significant direct and indirect economic benefits during the construction and over the life of the project through employment, transit fees, availability of clean fuel, economic and industrial growth.
New business and investment opportunities.
C. POTENTIAL GAS IMPORT SOURCE COUNTRIES (2003-04) Iran
Proven Reserves - 812 TCF Production -1900 BCF Export Turkmenistan
Proven Reserves -101 TCF Production -790 BCF Export - 590 BCF Qatar
Proven Reserves - 300 TCF Production - 690 BCF Export -168 BCF
Issues in Pipeline Gas
Transit terms. Security of supplies. Need for multilateral framework for addressing critical issues. Regional geopolitical sensitivities. Global politics need to be addressed.
D. Improve Governance
OGRA (Oil Gas Regularity Authority), established. HOLDCO operational. Department of Petroleum and Energy Resources being restructured to perform policy formulation and coordination functions.
E. Promote Foreign Investment
Investor friendly “Petroleum Exploration and Production Policy 2001” announced in May 2001
Investment of US$ 978 million has been committed since October 1999 which includes: Exploration US$ 73 million Gas Fields Development US$ 505 million Oil Pipelines US$ 278 million Marketing US$ 55 million Local Investment US$ 67 million
F. Improve Environment
Increasing natural gas use to replace fuel oil in power generation, and petrol/diesel in transport by CNG Doubling the availability of LPG Improving petrol and diesel oil specifications
Some Options for Pakistan’s Energy Sector
Oil & Gas
Total potential estimated at about 27 billion barrels of oil and 282 trillion cubic feet of gas. Only 737 million barrels of oil and 38 trillion cubic feet of gas have so far been discovered. Major future discoveries of oil and gas will come from the offshore, Balochistan and Dumber Block of Kirthar.
Shift to Gas A shift to gas is the least cost and preferred option for:
Economic Benefits Security of Energy Supplies Societal Equity Environmental Improvement Strategic Regional Cooperation
Compressed Natural Gas (CNG)
After successful introduction of natural gas as transport fuel to replace petrol, policy actions are being formulated to promote large scale replacement of diesel oil by CNG.
Coal (2006-07)
Thar field is the 5th largest (185 billion tonnes) coal field in the world but has remained un-exploited. Current production of coal 4.9 million tonnes per year, constituting less than 5% of our present energy mix. Coal must come into immediate focus for power generation, and industrial, commercial and domestic use.
COAL CONSUMPTION PATTERN OF PAKISTAN Cement 20%
Power 4% BrickKilns 53% Coke 23%
Coal Reserves & Production In Million Tonnes
Province Production
Reserves
Annual
Sindh 184,123 0.978 Punjab 256 0.400 Balochistan 196 1.673 NWFP 81 0.041 ----------------------------------------------Total: 184,656 3.092
Strategy to Increase Coal Use
Policy Statement: - Share of indigenous coal in energy mix at national level to be enhanced from present 4.5% to 20% Long Term Measures: - Secure private investment for exploitation of Thar. - Feasibility studies to establish coal based thermal power plant (Contd..)
Immediate Measures: - Conversion of processing industry on coal through policy incentives. - Study utilization of coal for town gas. - Study in-situ gasification of Thar coal fields. - Preparation of mining feasibility study on Thar coal.
- Provincial Government to develop infrastructure in coal fields .
Enviromental Issues:
Damages to the environment, can either be knowingly or unintentionally.
Directly effect on human life in the region.
Oil’s spill over effect.
Air emission.
Enviromental Issues: (contd.)
Liquid waste.
Soil contamination.
Extinction of plants and species.
The End
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