Pakistan Petroleum sees good prospects of international exploration

Jan 23, 2003 01:00 AM

The Pakistan Petroleum Limited (PPL), which focuses its eyes on the Middle East, Central African, Central Asian and South East Asian countries, says there are good prospects of international exploration. "Exploration opportunities are presently being reviewed in Central Africa, Central Asian States, South East Asia, Yemen and Iran," the company said in its annual report for the year ended June 30, 2002 for its shareholders.
The primary business of the company is the exploration and production of oil and gas resources. Over the last 52 years of operations, the company has played a pioneering role in the augmentation of indigenous hydrocarbon resources. In line with its past efforts, the company is continuing an extensive exploration programme to increase its hydrocarbon reserves.

In addition to the exploration activities being undertaken within Pakistan, the company is also looking actively into the prospects of international exploration. In this respect seismic data from Iraq was evaluated but was not pursued further due to discouraging seismic interpretation and mapping results.
The company's exploration strategy is aimed at replenishing and if possible, increasing its existing petroleum reserves. The hydrocarbon potential of high prospective areas in Pakistan is limited as most of the low to medium risk/cost areas are already held under concessions and generally, medium to high risk/cost areas are available as open acreages. Therefore, the company is gradually venturing into relatively unexplored medium to high risk/cost frontier areas.

The company is also looking forward for exploration opportunities in offshore areas and in Balochistan Basin. Prospective areas identified during the ongoing evaluation of open acreages in different basins of the country will be applied for grant of exploration license.
In order to further strengthen the prospect appraisal process, PPL is establishing a dedicated team of geologists/geophysicists. This team, in association with an Exploration Consultant, will undertake evaluation of different geological basins and shortlist areas for detailed prospect evaluation. They will also endeavour to identify acreages/prospects for future exploratory activities. Among the prime objectives would be the evaluation of relatively unexplored frontier basin and subtle plays utilising modern exploration techniques.

The Directors' report and accounts for the financial year under review show that the profit before tax amounted to Rs 2,381,659 mm (200-2001: Rs 1,166.845 mm) while profit after tax amounted to Rs 1,819,455 mm (2000-2001: Rs 459,272 mm). The increase in profits is mainly due to the dismantling of the Agreement and increase in prices of Sui and Kandhkot gas upon execution of the 2002 GAP.
The PPL's share of production of natural gas from the Sui, Kandhkot, Block-22 Miano and Qadirpur fields, and production of associated gas, LPG and NGL from Adhi Field for the financial year 2001-2002 in terms of energy, was equivalent to 151,000 bpd of crude oil.This resulted in considerable savings in foreign exchange to the country. In addition to this the company paid to the government exchequer approximately Rs 9 bn for the financial year 2001-2002 on account of gas development surcharge, corporate taxes, royalties, excise duty, sales tax, and workers' welfare fund.

In line with its policy to liberalise the oil and gas sector and introduce market reforms, the government is committed to restructure and privatise the Company and as a significant step forward the cost-plus Sui Gas Well-head Price Agreement of July, 1982 was dismantled and replaced with a market based Sui and Kandkot Gas Price Agreement effective from July, 2001.
The new pricing regime for Sui and Kandkot gas is expected to substantially increase the profitability of the company and its cash flow in the coming years and would place it on a sound commercial footing. This would also help the company to pursue an extensive exploration strategy to exploit the country's untapped oil and gas resources.

To diversify its current exploration portfolio the company plans to venture in relatively unexplored areas including offshore blocks and is also reviewing international exploration opportunities.
The company's auditors in a report said: "The expenditure incurred during the year was for the purpose of the company's business; and the business conducted, investments made and the expenditure incurred during the year were in accordance with the objects of the company."

Source: Jang Group of Newspapers
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