In the 1950s, Pakistan did not attract much foreign direct investment nor did the country’s private sector companies have access to substantial risk capital resources to undertake hydrocarbon exploration and production projects. Consequently, state-owned firms played a pivotal role in the domestic oil and gas sector.
But times are changing as the country is emerging into more rapid economic development. Accordingly, many local and foreign private companies now have entered this sector with financial resources.
Petroleum Exploration (Pvt) Limited (PEL) is one of the county’s largest private sector E&P companies, founded in 1994. It operates nine onshore and one offshore exploration licenses; five development and production leases and one mining lease; and has drilled a number of exploration and development wells.
Mr Zaheeruddin, Chairman & Chief Executive, disclosed that PEL has recently made a significant discovery of hydrocarbons in the southern part of his country. A well named as Ayesha-1 in Badin South - IV Block, completed on February 14 2014 after achieving the target depth of 2,400 metres, flowed 11.32 mmcfd of good quality natural gas with a heating value of 967 BTU. The well also flowed 115 barrels of 57º API condensate per day with a wellhead pressure of 2,000 PSI. PEL has also expanded its exploration activities overseas by acquiring three exploration permits in Morocco and two in Myanmar. It is all set to drill its first exploratory well in Morocco during first half of 2014.
Mr Zaheeruddin explains why PEL is actively engaged in the E&P sector and how the company can enhance its profitability and knowledge sharing by relying on global partnerships. “We today, in the private sector, hold the largest petroleum exploration acreage in Pakistan,” he says. “We are exploring onshore as well as offshore in Pakistan and we are exploring overseas in Morocco and Myanmar. We are the only private sector company that is working in the deep water of Pakistan in the Arabian Sea.”
He adds, “In the group, we have a strong professional base with work experience of OGDCL (Pakistan-based Oil & Gas Development Co Ltd), the Government of Pakistan, as well as BP and other foreign companies. We take advantage of the latest technology to develop strong technical teams. We also take technical advice from Canadian and British consultants.”
Mr Zaheeruddin has pointed out that PEL is undertaking a major project which would involve the development of a low BTU gas field and commissioning of a 120 MW power generation plant at a total combined investment of $300 million. The company is financing the project through collaboration with banks and investors.
“Until today, we have spent over $250 million equity in joint ventures with partners. It is the trust of our partners that enables us to undertake major projects,” Mr Zaheeruddin says. “There is a very bright chance of finding hydrocarbons in the offshore of Pakistan. We are in discussions with different companies for partnership on mutually agreed terms.”
Mr Zaheeruddin contends that offshore drilling offers the best opportunity to PEL and the country in the future. The deep waters of Pakistan hold rich untapped reserves of oil and gas and accordingly, partnerships with global energy players could result in profitable ventures.