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International petroleum - seminar.

Hydel resources must be exploited. Out of the total electric generation capacity of 8500 MW, only 2900 MW is hydro-based. While the location controversy goes on, small power dams may be built, specially in Northern areas. As regards petroleum industry, $ 20 billion investment will be required over the next 15 years. This will call for investment from public and private sectors and contribution of indigenous and foreign businessmen.

The object of the Seminar was to explore "New Directions and Strategies for accelerating Petroleum Exploration and Production in Pakistan". It was sponsored by the Ministry of Petroleum and Natural Resources, Government of Pakistan. It was inaugurated by Mr. Ghulam Ishaq Khan, President of Pakistan and was attended by over 100 experts from 28 countries and about 400 Pakistani experts participated in it.

The President in his inaugural address said that petroleum is among factors that can make or break the edifice of the economic future we are so assiduously striving to erect." Initially, the President explained energy deficiency of Pakistan, which has to import 70 to 75 per cent of oil and 25 to 30 per cent of energy requirement. Per capita energy consumption is 0.3 tons of oil equivalent, which is the one sixth of global average. Deficiency is likely to increase due to rapid population increase, development efforts and social uplift programmes. Other factors pushing up the demand for energy are industrialization, agricultural growth and improvement in the living standard of the people which need increasing energy.

Energy requirement is likely to shoot up from present 29.2 million TOE to 50 million TOE in 2000 AD. About 45 per cent of energy consumption is in domestic sector, 33 per cent in industrial sector and 13 per cent in transportation. Oil and gas provide 75 per cent of energy, hydel resources 9 per cent and coal 7 per cent. Domestic production is small and imports costly and oil is indispensable for transportation and petro-chemical industry while its burning for power is not justified. Same is the case with natural gas. Indigenous coal is of low quality and reserves are small.

As a result, greater reliance has to be placed on hydel and nuclear power but these have problems of their own. Technologies need to be improved. The shortage of hydro-carbon energy is due to our inability to discover vast natural resources. So far 151 million tonnes of oil out of the total potential of 36 to 53 billion barrels of oil and 19.5 trillion cft of gas out of the potential of 140 to 150 trillion cft have been discovered. Narrowing the gas between the potential and the discovery is a great challenge to our planning ingenuity. Some advance has been made since independence when production was 1500 barrels of oil a day and no gas. Now, daily output of oil is 75000 barrels and of gas 1.5 billion cft saving $ 1600 million a year in foreign exchange.

Exploration efforts were accelerated during the 1982-87 period but slackened in the following two years. In the last one year efforts have been reaccelerated and 23 exploration concessions granted. But the President emphasised the need to accelerate efforts further to achieve selfreliance in oil and gas. Today oil is not only a source of energy but also a basis of economic and industrial growth a defence weapon and instrument to conduct foreign affairs more successfully. New Petroleum Policy has been announced recently. It gives freedom and incentives in the hydrocarbon field.

Hydel resources must be exploited. Out of the total electric generation capacity of 8500 MW, only 2900 MW is hydro-based. While the location controversy goes on, small power dams may be built, specially in Northern areas. As regards petroleum industry, $ 20 billion investment will be required over the next 15 years. This will call for investment from public and private sectors and contribution of indigenous and foreign businessmen. Investment should be accompanied by modern technology. Oil refining also needs investment. Present capacity meets half the demand for petroleum products, and a half of it is over 25 years old and needs modernization. Infrastructure facilities such as a network of pipelines also need attention. Adequate oil storage at suitable places is also required.

Welcome address was read by Ch. Nisar Ali Khan, Federal Minister for Petroleum and Natural Resources. He emphasised the importance of adopting the best suitable strategy to tap the existing oil and gas resources of the country. Oil and gas consumption was increasing 8 per cent a year. In nine years it should double. In 2,000, Pakistan will need, one million barrels per day of oil equivalent to energy. At this competition, present proven oil reserves of about 163 million barrels should not last even for six months. About 30 per cent of exports finance oil imports. There are vast reserves of oil but stepped up efforts are needed to discover and produce these.

Since 1947, energy consumption has increased 10 times which needs to be controlled along with discovery of additional reserves of oil and gas. The object of this seminar was to learn the experience of other countries to step up the oil and gas exploration. New petroleum policy provides incentives and a refinery can be set up without Government permission. Private sector can undertake gas distribution and compressed natural gas can be used in vehicles. The new gas price policy should also attract foreign private investment.

The keynote address was read by Dr. Gulfraz Ahmad, the Chairman of the Oil and Gas Development Corporation. He said that, although near the Middle East, Pakistan is deficient in energy which is impending economic growth and industrialization and improvement in productivity. Social sectors are also being affected adversely and per capita energy consumption in Pakistan is one half of the average of developing countries. In sources, oil and gas provide 77 per cent, hydel power 18 per cent, coal 4 per cent and LPG and nuclear 1 per cent. About 75 per cent of oil consumption comes from imports and foreign exchange cost is $ 1750 million a year. Oil consumption is increasing at 8 per cent a year and gap between consumption and production is widening. Stability and growth of demand for oil and favourable geological conditions attract large scale private investment. Economic reforms are another great incentive.

Foreign exchange controls have been dismantled and import duties greatly reduced and Tax holiday of 3 to 8 years declared. In addition to economic reforms, new petroleum policy has been announced which would be discussed in the Seminar. Present environment for oil and gas exploration in Pakistan is unprecedented in the world. Exploration history of Pakistan coincides with the global history. Geologically the situation is favourable. So far all discoveries of oil have come from Indus Basin. Balochistan Basin is yet to be explored.

From 1866 to 1947, 44 exploratory oil wells were drilled. During 1950's private companies were active although their activities were reduced by the end of decade. OGDC came into being in 1961 and its successes during 1960s and 1970's attracted foreign investment. Between 1947 and 1983, 122 wells were drilled and success ratio was one to six. Silver lining came in early 1980's when new oil fields were discovered in the South. Between 1983 to 1991, 129 wells have been drilled with 59 discoveries and success ratio of one to two. Now, capacity to produce 76,000 barrels of oil per day is there, a target set for 1993, of which 50 per cent output comes from Pothowar and 50 per cent from Sindh. It is estimated that there are 2200 billion barrels of oil in Pakistan's sedimentary basins, 2 per cent of which has been trapped as a potential source. In case of gas, Pakistan has discovered 30 trillion out of estimated potential of 200 trillion, or about 15 per cent.

Lack of efforts is the cause of failure. Only 250 wells have been drilled or one third of a well per 1000 sg. km. against the average of 6 in India, 10 wells in OPEC and 300 wells in USA. About 65 per cent of area is with private sector and 36 joint venture agreements have been signed with 21 companies including 17 foreign, 3 local and 1 public sector, i.e. OGDC. Gas transmission infrastructure is a great asset and gas provides 35 per cent of energy which can be increased to 45 per cent. Gas exploration efforts have been discouraged by restricting its consumption in power sector. Now, this restriction has been removed. The Chairman OGDC described the global development of technology and efforts in Pakistan for improvements in this direction.


A large number of high quality papers were read in the Seminar by Pakistani and foreign delegates. Only a few are mentioned here due to lack of space. Following were the major fields of discussion in the Seminar.

1) Petroleum Exploration, New Directions.

2) Petroleum and Energy for Growth and


3) Petroleum Production and Optimal


4) Exploration Strategies - Role of Joint


5) Petroleum Legislation and


Mr. Arif Kemal read a paper on "Geology and New Trends for Exploration in Pakistan" in which he spoke on the geological aspects and scope for finding oil. Technically, he talked of three plates - Indo-Pakistan, Arabian and Eurasian plates with their triple junction north west of Karachi. With improvement of technology and better understanding of the geological history, new oil and gas discoveries have been made.

Mr. A. Reymond of Beicip France read a paper on "New Methods and Tools in Basin Evaluation" in which he made a short review of modern geological/geochemical models which can systematically be applied to various types of sedimentary basins. Volume and timing of generation of HC, migration vs. information of traps and their geometric reconstruction. Heat flow history etc. are those parameters to be integrated to arrive at the clear picture of petroleum systems, migration pathways and migration efficiency, etc.

Mr. Ongun Yoldemir of Turkish Petroleum Corporation Ankara Turkey read a paper on "Parameters Controlling the occurrence of oil in the Thrust Belts - an example from se Turkiye". In it he said that thrusting is one of the most prominent technical features throughout the whole Alpine-Himalayan helt. In South East Turkiye, two phases of thrust tectonism took place. Crelaceous thrusting caused the occurence of a deep basin and by placement of the Allocthonous units cretaceous aged source rock and reservoir rock had been hurried, within fault hounded structure.

Mr. Said A. K. Alizai of SUPARCO, read a paper on "Application of Satellite Imagery for Hydrocarbon Exploration in Pakistan" in which he spoke about the use of satellites imagery for the study of landfarms, geomorphology, and physiography on regional scale. This provides a new insight for the definition of structural, sedimentary and petrological regions.
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Title Annotation:Seminar
Author:Khan, AbdulMajid
Publication:Economic Review
Date:Feb 1, 1992
Previous Article:New petroleum policy to give big boost to oil production.
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