Iranian presence in neighboring countries in oil and gas exploration

Director of Exploration of National Iranian Oil Company (NIOC) stated that currently Iran has oil and gas exploration relations with four neighboring countries. Transferring exploration technologies to neighboring countries is creating value and generating income for Iran.

Making the remarks in a press conference, Mehdi Fakour said that exploration has a special status in the oil industry, stressing that exploration maps the country's energy future.

The transfer of exploration technologies to neighboring countries can create value and generate income, the official further reiterated.

Pointing out that there is no local exploration management in the countries around Iran, the director of the exploration of the National Iranian Oil Company said this is a prominent position for the Iranian Ministry of Oil to present itself to the neighboring countries and Eurasian countries, and they are also willing to cooperate with Iran.

Emphasizing that this important issue has not been possible in the past years, Fakour clarified, “We now have exploratory relations with four neighboring countries.”

He pointed to the holding of meetings with Oman and said, “We had meetings with the minister of Oman and they accepted all the proposals for exploration cooperation to form a joint team and advance the agreements.”

The official also named Tajikistan, Russia, and Iraq as the three other neighboring countries cooperating with Iran in the field of exploration.

 

Pakistan awards exploration blocks to state-run Exploration & Production companies

Reportedly, the Government of Pakistan has awarded six petroleum exploration blocks in Sindh, Baluchistan and Punjab to state-run oil and gas exploration and production companies.

The exploration licences (ELs) and petroleum concession agreements (PCAs) were signed by Petroleum Secretary and Director General of Petroleum Concessions on behalf of the GoP and Managing Directors of Oil and Gas Development Company (OGDCL), Mari Petroleum Company (MPCL) and Pakistan Petroleum at a ceremony witnessed by newly appointed Minister for Energy.

These included Block No. 3068-6 (Killa Saifullah) and Block No. 3067-7 (Sharan) in Baluchistan with OGDCL and MPCL; Block No. 3069-9 (Suleiman-Balochistan) with OGDCL and PPL; and Block No. 2467-17 (Sujawal South) in Sindh, Block No. 3273-5 (Jhelum) and Block No. 3272-16 (Lilla) with OGDCL.

Director General, Petroleum Conces­sion reported that minimum firm work commitment for these blocks was US$24.68 million for a period of three years. The companies are obligated to spend a minimum of US$30,000 per year in each block on social welfare schemes. Annual social welfare obligation in respect of these six blocks is US$180,000.

The Killa Saifullah block covering an area of 2421.96 sq-km is located in Killa Saifullah district, while the Sharan block covering an area of 2497.89 sq-km is situated in Killa Saifullah and Zhob districts. The Suleiman block covering an area of 2172.89 sq-km is located in Musakhel, Zhob, Killa Saifullah and Loralai districts. The Sujawal South block covering an area of 1914.1 sq-km is located in Sujawal district of Sindh. The Jhelum block covering an area of 1524.65 sq-km is located in districts of Jhelum, Gujrat and Mandi Bahauddin, while the Lilla block covering an area of 2361.12 sq-km is situated in Chakwal, Jhelum and Khushab districts.

OGDCL is a public limited company engaged in exploration and production (E&P) activities in the country for the last four decades. The Company holds the largest share of 41% in oil and 36% in gas out the total reserves in the country. Its percentage share of total oil and gas production in Pakistan is 47% and 29%, respectively. OGDCL is the operator of 41 exploration licences and working interest owner in six other exploration blocks operated by various E&P companies. OGDCL is currently produces 35,805 barrel oil per day (bopd) oil, 1,012 million cubic feet per day (mmcfd) gas, 761 tons LPG and 53 tons of sulphur per day.

PPL is also a public limited company engaged in exploration and production activities in the country. It is Pakistan’s oldest and largest E&P Company incorporated in 1950. Its percentage share of total oil and gas production in Pakistan is 13% and 19%, respectively. PPL is the operator in 26 exploration licences and working interest owner in 17 other exploration blocks operated by various E&P companies. PPL currently produces 10,076 bopd Oil, 673mmcfd gas and 238 million tons LPG.

Mari Petroleum is an integrated exploration and production company currently managing and operating Pakistan’s largest gas reservoir at Mari gas field in Daharki, Sindh. MPCL is the second largest gas producer in the country with 753mmcfd gas and 1,722bopd oil. MPCL is the operator in six development and production leases, 11 exploration licences and working interest owner in seven other exploration blocks operated by various E&P companies.

The Energy Minister expressed the hope that licences would benefit the country in the form of additional hydrocarbon reserves over the next few years. He said the execution of ELs and PCAs would not only enhance investment in the petroleum sector but also contribute to bridging the gap between demand and supply of energy in the country.

Russia enters Pakistan in search of oil and gas

Russia is expected to soon return to Pakistan’s petroleum sector after five decades with fresh investment commitments in new exploration and development techniques and construction of cross-country pipelines.

While the two countries are at an advanced stage of talks on a government-to-government contract of a 1,100-kilometre gas pipeline from Karachi to Lahore with an estimated cost of US$2.5 billion, some Russian companies are preparing to enter Pakistan’s exploration and development sector.

Reportedly a leading Russian petroleum company, JGC Rosgeologia (Rosgeo) has recently signed non-binding agreements with two public sector exploration and development companies for investment cooperation. The MoU was signed by KPOGCL’s CEO Raziuddin Razi and Rosgeo’s CEO Roman S. Panov. The two firms would promote the establishment and development of mutually beneficial cooperation in the above areas.

According to the MoU signed with Khyber Pakhtunkhwa Oil and Gas Company Ltd (KPOGCL), Rosgeo from Moscow will extend long-term cooperation in KP’s exploration and production (E&P) sector. The two firms would jointly bid for fresh exploration and concession blocks in upcoming transactions and acquire shareholding from existing companies.

The KPOGCL was created after the 18th Constitutional Amendment to share with federal government ownership of oil and gas rights. In 1961, Pakistan set up its largest E&P firm, the Oil and Gas Development Company Ltd (OGDCL), with the financial and technical support of the then USSR technical experts. The cooperation remained almost non-existent for decades due to diplomatic reasons.

The agreement envisages long-term cooperation between the two companies to perform various E&P activities, including geological and geophysical field works, 2D and 3D seismic data acquisition, drilling and related services, warehousing and jointly acquiring concession blocks in various parts of Pakistan.

Specific cooperation will be in the key priority areas of increasing the economic potential of Pakistan through the identification of new hydrocarbon fields and efficient use of the natural resources by ensuring environmental protection and sustainability.

The joint venture would also carry out geological surveys within Pakistan, using the modern technologies and methods. The Russian company will be responsible for the technical planning and execution, arrangement of rigs and recorders, while KPOGCL will be responsible for security, logistics and transportation, gensets, earth moving equipment, cranes, tractors, camp facilities, local support manning, communication, local clearances, permits, licences, business development, etc.

The cooperation of the two companies will be implemented in phases. A permanent working group comprising the two companies has been constituted to identify, study and evaluate specific projects of mutual interest.

For every specific project of mutual interest, the two companies would establish the appropriate scheme of cooperation and establish a joint company that will undertake the execution of the various projects.

Rosgeo also signed a similar MoU with the OGDCL for E&P cooperation on broader terms within their blocks for mutual benefit and overall reciprocity in accordance with the relevant laws, rules and regulations.

The cooperation under the MoU would include examining the possibility of “farm-in” and “farm-out” opportunities in existing exploration licences and look into opportunities in development and production fields including opportunities related to the application of enhanced oil recovery (EOR) techniques.

The two sides would look into mutually beneficial activities in acquisition, processing and interpretation of 2D and 3D seismic data and formulate strategies for sharing the expertise and training the personnel of both the companies.