Oil & Gas Sector of Pakistan

Presenters :
• Muneeba Zafar
• Fahad Kamran
• Sana Abbas
Pakistan Primary Energy Mix YR-2001

Consumption: 44.5 Million TOE

• Oil : 43.5 %
• Gas : 41.5 %
• Hydro: 9.2 %
• Coal: 4.5 %
• Nuclear: 1 %
• LPG: 0.3 %
Pakistan Primary Energy Mix YR-2006

 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

 Pakistan: 342 million barrels = 0.03% of world

World Oil Supply
Total world’s supply 75 million barrels per day

Pakistan: 63,000 Barrels per day i.e 0.063 mb/d.

Which is 0.08% of world.
Oil Consumption

 Total Consumption of world : 73.9 million barrels

per day.

 Consumption of Pakistan: 0.386 mb/d = 0.52% of

world
Pakistan’s Oil Consumption Pattern.

Domestic
2% Other/Govt
2%
Industry
10%

Agriculture
1% Power
35%

Transport
50%
World Gas Reserves
 Total Reserves: 5,304 trillion cu ft.

 Pakistan: 24 tcf = 0.45% of world

World’s Gas supply and consumption

 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.
Industries
(excluding
fertilizer)
17% Commercial
23%

Fertilizer
15%

Domestic
15%

Transport
Power 4%
26%
Pakistan Oil & Gas
Resources
and Infrastructure
Exploration of Oil & Gas

 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

Oil Natural Gas

(Million (Trillion
barrels) cubic feet)
 Discovered 737 38
 Produced 441 14
 Remaining 296 24
Oil/Gas/LPG Demand & Production

Oil (b/d) 386,000 58,000 328,000

Imports

Gas (bcf/d) 2.9 2.4 0.5

Unsatisfied
demand

LPG (t/d) 1,200 857 343

Unsatisfied
demand
Supply & Demand of Oil

 Demand 19mt/y
 Supply
Local Products 08.7mt/y
Imported Products 10 mt/y
Imported Crude 143,683 b/d
($ 1.362m)
Annual Import Bill $ 3,326m
Pakistan’s Oil Refineries

Pakistan
 Khalifa Refinery (PARCO-2)
 Mid Country Refinery (PARCO)
 Karachi Refinery (Bosicor Pakistan Limited)
 Pakistan Refinery Limited (PRL)
 National Refinery Limited (NRL)
 Attock Refinery Limited (ARL)
 Indus Oil Refinery Limited (IRL)
Pakistan Natural Gas Network
(Km)

Northern Southern
System System Total

Transmission Lines 5,000 3,000 8,000

Distribution Lines 32,000 21,000 53,000
No. of consumers 2.0 m 1.6 m 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

 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

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
D. Improve Governance

 GRA and OGRA, established.

 HOLDCO operational.
 Department of Petroleum and Energy
Resources (DGs Oil/Gas/PC) being
restructured to perform policy formulation and
coordination functions.
E. Promote Foreign Investment

 A new, more 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.
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

 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 Reserves Annual Production

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.

WTO Effect :

Pakistan will be 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.