May 20, 2021(MLN): Pakistan’s leading Exploration & Production (E&P) companies succeeded in winning an offshore block for the drilling of oil in Abu Dhabi.
According to sources, United Arab States (UAE) has unofficially confirmed that a consortium of Pakistan Petroleum Limited (PPL), Mari Petroleum Company Limited (MPCL), Oil and Gas Development Company Limited (OGDCL), and Government Holdings Private Limited (GHPL) had been successful in the bidding process for winning this offshore drilling block.
As reported by the Newztodays, the Ambassador of UAE confirmed the news stating that the E&P companies of Pakistan will be investing $400 million in five years.
The award of the offshore block is yet to be officially announced by the UAE, nonetheless, the consortium will start the process of exploration for oil and gas in the earliest as the award is declared, the research highlighted.
This could verily bring about a massive boost in the oil industry of Pakistan knowing that a new expedition of oil exploration has begun. Moreover, the E&P companies of Pakistan have technology and experiences when it comes to onshore drilling of oil and gas therefore aspirations are higher than ever.
In accordance with the Newztodays, PPL conducted a detailed research and development program both inside and outside Pakistan to reload and potentially diversify its oil and gas reserves.
“Over the past five years, the company’s oil and gas exploration and development activities have been in both Pakistan and Iraq. It has conducted 79 exploratory explorations, including a well in Iraq, with its partners. It has so far added 0.6 trillion cubic feet (TCF) of gas to the company’s reserve base.”
With a clear objective of development in its international operations, the company went on to identify another opportunity for oil and gas exploration in Abu Dhabi, UAE. This brought up an opportunity for other E&P companies including Mari Petroleum Company Limited (MPCL), Oil and Gas Development Company Limited (OGDCL) to form a consortium for equal participation.
In fact, Abu Dhabi is considered one of the richest states around the world for offshore drilling that produces a staggering 3 million barrels of oil per day and approximately 10 BCF gas per day.
This was Abu Dhabi’s second bidding where five blocks (two on shores and 3 offshores) were offered. The deadline to submit competitive bids was December 31, 2019.
Examining the future, joining Abu Dhabi National Oil Company (ADNOC) could bring substantial advantages for Pakistan such as valuable foreign exchange in the long run, which could help meet Pakistan’s energy needs.
There will be a great possibility for Pakistan’s E&P companies to export research and manufacturing services.
“Based on this detailed technical and commercial evaluation, the consortium intended to bid for the electoral bloc, which consists of a program of research and evaluation work divided into three phases over a period of nine years”, said Newstodays.
It is estimated that the initial investment of the consortium would be $400 million over the first five years of exploration, evaluation and development. By the time of production, the project will be self-sufficient to sustain its operations and begin generating foreign exchange for the country.
However, the blocks offered by the ADNOC fall in high-speed hydrocarbon reserves, where four participating E&P companies will be held responsible by the GOP in case of non-discovery. Yet the E&P companies are ready to take the risk knowing the considerable advantages coming with it. Further, all the companies have adequate financial resources available to meet the appropriate foreign exchange requirements.
If successful, this investment could lead towards producing 10,000 to 14,000 BOEs in oil and gas production, tuning up to billions of dollars. With that, the net cash flow will be in the foreign exchange rate and the entry rate for investment in conservative matters ranges from 16% to 18%. This could lead to a massive opportunity for the energy sector of Pakistan.
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