Oil & Gas Sector Of Pakistan

Oil & Gas Sector of Pakistan Presenters : • Muneeba Zafar • Fahad Kamran • Sana Abbas

Pakistan Primary Energy Mix YR2001 Consumption: 44.5 Million TOE • Oil : • Gas : • Hydro: • Coal: • Nuclear: • LPG:

43.5 % 41.5 % 9.2 % 4.5 % 1 % 0.3 %

Pakistan Primary Energy Mix YR2006

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In Yr01 – Oil 43.5 % & Gas 41.5 %

Global and Regional Comparison.

World Oil Reserves 

Total world oil reserves are approximately 1,081 to 1,293 billion barrels (2005)

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Pakistan: 342 million barrels = 0.03% of world (2005)

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

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Total Consumption of world : 73.9 million barrels per day. (2004) Consumption of Pakistan: 0.386 mb/d = 0.52% of world (2004)

Pakistan’s Oil Consumption Pattern. (2006) Domestic 2% Industry

Other/Govt 2%

10% Agriculture Power

1%

35%

Transport 50%

World Gas Reserves

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Total Reserves: 5,304 trillion cu ft. (2004)

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Pakistan: 24 tcf = 0.45% of world (2004)

World’s Gas supply and consumption (2003-04) 

Total world supply : 234 billion cu. Ft per day. Pakistan: 2.4 bcfd = 1.0% of world

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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

Exploration of Oil & Gas (2006)      

First exploration well First oil discovery Total exploratory wells drilled Total discoveries Success rate Sedimentary basin area -

1866 1915 653 185 - 1 : 3.5 827,268 sq km

Oil & Gas Reserves (2003-04)

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Discovered Produced Remaining

Oil (Million barrels) 737 441 296

Natural Gas (Trillion cubic feet) 38 14 24

Oil/Gas/LPG Demand & Production(2003-04) 

Oil (b/d)

386,000

58,000

328,000

2.4

0.5

Imports

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Gas (bcf/d)

2.9 Unsatisfied

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LPG (t/d)

1,200

demand 857 demand

343 Unsatisfied

Supply & Demand of Oil (2003-04)  

Demand Supply Local Products Imported Products Imported Crude Annual Import Bill

19mt/y 08.7mt/y 10 mt/y 143,683 b/d ($ 1.362m) $ 3,326m

Oil Refining Capacities (Million Tonnes

per Year) 

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Existing ARL PRL NRL Dhodak PARCO Total:

1.66 2.20 2.80 0.12 4.50 11.28

Under Installation Bosicor 1.2 Proposed Iran Pak

6.0

Pakistan Natural Gas Network (Km) Northern

Southern

System

System

Total

Transmission Lines Distribution Lines No. of consumers

5,000 32,000 2.0 m

3,000 21,000 1.6 m

8,000 53,000 3.6 m

Final Gas Consumed

984

1,020

2,004

(MMCFD)

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  

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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.) 

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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 

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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 

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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 

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The import of natural gas will provide multidirectional 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.) 

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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

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Proven Reserves - 812 TCF Production -1900 BCF Export Turkmenistan

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Proven Reserves -101 TCF Production -790 BCF Export - 590 BCF Qatar

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Proven Reserves - 300 TCF Production - 690 BCF Export -168 BCF

D. Improve Governance 

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GRA (Gas Regularity Authority) and 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 US$ 55 million • Marketing • Local Investment US$ 67 million

F. Improve Environment 

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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 

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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.

Oil Refining and Infrastructure 

Options be evaluated of putting up new refineries by value addition of the existing refineries if the energy mix ratio of oil to gas (presently about 60/40) is to shift in favor of gas to say 70/30 or 80/20.

Coal (2003-04) 

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Thar field is the 5th largest (185 billion tonnes) coal field in the world but has remained un-exploited. Current production of coal 3.5 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..)

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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.

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- Provincial Government to develop infrastructure in coal fields .

Enviromental Issues: 

Damages to the environment, can either be knowingly or unintentionally.

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Directly effect on human life in the region.

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Oil’s spill over effect.

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Air emission.

Enviromental Issues: (contd.) 

Liquid waste.

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Soil contamination.

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Extinction of plants and species.

WTO Effect :

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Pakistan will be benefiting from the implementation of WTO. Free trade of oil and gas. Beneficial for Pakistan as it is heavily dependent on oil and gas import. Reduction in cost of products. Change in infrastructure by import of technological goods.

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The End