Oil and gas Ind 3

8/14/2019 Oil and gas Ind 3

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Oil & Gas Sector ofOil & Gas Sector of

PakistanPakistan

Presenters :

Muneeba Zafar

Fahad Kamran

Sana Abbas


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Pakistan Primary Energy Mix YR-Pakistan Primary Energy Mix YR-

20012001Consumption: 44.5 Million TOE

Oil : 43.5 % Gas : 41.5 % Hydro: 9.2 % Coal: 4.5 % Nuclear: 1 %

LPG: 0.3 %


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Pakistan Primary Energy Mix YR-Pakistan Primary Energy Mix YR-

20062006

In Yr01 In Yr01 Oil 43.5 % & Gas 41.5 %Oil 43.5 % & Gas 41.5 %


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Global and RegionalGlobal and Regional

Comparison.Comparison.


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World Oil ReservesWorld Oil Reserves

Total world oil reserves are approximately 1,081 toTotal world oil reserves are approximately 1,081 to1,2931,293 billionbillionbarrels (2005)barrels (2005)

Pakistan: 342 million barrels = 0.03% ofPakistan: 342 million barrels = 0.03% ofworld (2005)world (2005)


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World Oil SupplyWorld Oil SupplyTotal worlds supply 75 million barrels/day (2005)Total worlds supply 75 million barrels/day (2005)

Pakistan: 63,000 Barrels per day i.e 0.063 mb/d.Pakistan: 63,000 Barrels per day i.e 0.063 mb/d.

Which is 0.08% of world. (2005)Which is 0.08% of world. (2005)


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Oil ConsumptionOil Consumption

Total Consumption of world : 73.9 millionTotal Consumption of world : 73.9 million

barrels per day. (2004)barrels per day. (2004)

Consumption of Pakistan: 0.386 mb/d =Consumption of Pakistan: 0.386 mb/d =

0.52% of world (2004)0.52% of world (2004)


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Pakistans Oil ConsumptionPakistans Oil Consumption

Pattern. (2006)Pattern. (2006)

Power

35%

Transport50%

Agriculture

1%

Industry

10%

Domestic

2% Other/Govt

2%


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World Gas ReservesWorld Gas Reserves Total Reserves: 5,304 trillion cu ft. (2004)Total Reserves: 5,304 trillion cu ft. (2004)

Pakistan: 24 tcf = 0.45% of world (2004)Pakistan: 24 tcf = 0.45% of world (2004)


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Worlds Gas supply andWorlds Gas supply and

consumption (2003-04)consumption (2003-04) Total world supply : 234 billion cu. Ft perTotal world supply : 234 billion cu. Ft per

day.day.

Pakistan: 2.4 bcfd = 1.0% of worldPakistan: 2.4 bcfd = 1.0% of world

Total world Consumption: 232 billion cuTotal world Consumption: 232 billion cu

ft.per dayft.per day

Pakistan: 2.2 bcfd = 0.94% of worldPakistan: 2.2 bcfd = 0.94% of world


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Pakistans Gas ConsumptionPakistans Gas Consumption

Pattern.(2006)Pattern.(2006)

Commercial

23%

Domestic

15%

Transport

4%Power

26%

Fertilizer

15%

Industries

(excluding

fertilizer)

17%


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Pakistan Oil & GasPakistan Oil & GasResourcesResources

and Infrastructureand Infrastructure


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Exploration of Oil & Gas (2006)Exploration of Oil & Gas (2006)

First exploration wellFirst exploration well - 1866- 1866

First oil discoveryFirst oil discovery - 1915- 1915

Total exploratory wells drilledTotal exploratory wells drilled - 653- 653

Total discoveriesTotal discoveries -- 185185 Success rateSuccess rate - 1 : 3.5- 1 : 3.5

Sedimentary basin area - 827,268 sq kmSedimentary basin area - 827,268 sq km


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Oil & Gas Reserves (2003-04)Oil & Gas Reserves (2003-04)

OilOil Natural GasNatural Gas

(Million(Million (Trillion(Trillion

barrels)barrels) cubic feet)cubic feet)

DiscoveredDiscovered 737737 3838

ProducedProduced 441441 1414

RemainingRemaining 296296 2424


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Oil/Gas/LPG Demand &Oil/Gas/LPG Demand & Production(2003-04Production(2003-04))

Oil (b/d)Oil (b/d) 386,000386,000 58,00058,000 328,000328,000

ImportsImports

Gas (bcf/d) 2.9Gas (bcf/d) 2.9 2.42.4 0.50.5

UnsatisfiedUnsatisfied demanddemand

LPG (t/d)LPG (t/d) 1,2001,200 857857 343343

UnsatisfiedUnsatisfieddemanddemand


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Supply & Demand of Oil (2003-04)Supply & Demand of Oil (2003-04)

DemandDemand 19mt/y19mt/y

SupplySupply

Local ProductsLocal Products 08.7mt/y08.7mt/y

Imported ProductsImported Products 10 mt/y10 mt/y

Imported CrudeImported Crude 143,683 b/d143,683 b/d

($ 1.362m)($ 1.362m)

Annual Import Bill $ 3,326mAnnual Import Bill $ 3,326m


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Oil Refining CapacitiesOil Refining Capacities

(Million Tonnes(Million Tonnes

per Year)per Year)

ExistingExisting Under InstallationUnder Installation

ARLARL 1.661.66 BosicorBosicor 1.21.2 PRLPRL 2.202.20

NRLNRL 2.802.80 ProposedProposed

DhodakDhodak 0.120.12 Iran Pak 6.0Iran Pak 6.0

PARCOPARCO 4.504.50

Total:Total: 11.2811.28


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Pakistan Natural Gas NetworkPakistan Natural Gas Network

(Km)(Km)

Northern SouthernNorthern Southern

System System TotalSystem System Total

Transmission Lines 5,000 3,000 8,000Transmission Lines 5,000 3,000 8,000

Distribution Lines 32,000 21,000 53,000Distribution Lines 32,000 21,000 53,000No. of consumers 2.0 m 1.6 m 3.6 mNo. of consumers 2.0 m 1.6 m 3.6 m

Final Gas Consumed 984 1,020Final Gas Consumed 984 1,020 2,0042,004(MMCFD)(MMCFD)


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A Road Map to anA Road Map to anEfficientEfficient

Oil & Gas SectorOil & Gas Sector


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Road Map to an EfficientRoad Map to an Efficient

Oil & Gas SectorOil & Gas Sector

Liberalize Oil & Gas SectorLiberalize Oil & Gas Sector

Privatize Public Sector EntitiesPrivatize Public Sector Entities Accelerate Gas DevelopmentAccelerate Gas Development

Improve GovernanceImprove Governance

Promote Foreign InvestmentPromote Foreign Investment Improve EnvironmentImprove Environment


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A. Liberalize Oil & Gas SectorA. Liberalize Oil & Gas Sector

Shift from cost-plus to competitive regime.Shift from cost-plus to competitive regime.

Full commercial and operational authority toFull commercial and operational authority to

Board of Directors of public sector entities.Board of Directors of public sector entities.

Deregulation of petroleum prices,Deregulation of petroleum prices,discontinuation of the freight pool, review ofdiscontinuation of the freight pool, review of

marketing and dealer margins, etc.marketing and dealer margins, etc.

Cont.Cont.


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A. Liberalize Oil & Gas SectorA. Liberalize Oil & Gas Sector

(Contd.)(Contd.) Review pricing and taxation of oil andReview pricing and taxation of oil and

gas to allow consumers to benefit fromgas to allow consumers to benefit from

reductions in international prices and toreductions in international prices and toadjust to higher prices.adjust to higher prices.

Liberalize oil imports.Liberalize oil imports.

Rationalize gas retail pricing, linkRationalize gas retail pricing, linkconsumer price with substitute fuels.consumer price with substitute fuels.


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B. Privatize Public Sector EntitiesB. Privatize Public Sector Entities

Disinvest GOP / public sectorDisinvest GOP / public sector

shareholding in discovered fields andshareholding in discovered fields and

companies.companies.

PrivatizePrivatize PPLPPL

OGDCLOGDCL PSOPSO

NRLNRL


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C. Accelerate Gas DevelopmentC. Accelerate Gas Development

Fast-track exploration andFast-track exploration and

exploitation of domestic natural gasexploitation of domestic natural gas

resources .resources .

Increase domestic supply of LPGIncrease domestic supply of LPG

from refineries and fields .from refineries and fields .

Import natural gas through pipelineImport natural gas through pipeline

from neighboring countries and LPGfrom neighboring countries and LPG

through a new import terminal.through a new import terminal.


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C. Gas ImportsC. Gas Imports

Gas Imports: Replacement of imported oilGas Imports: Replacement of imported oil

with imported gas will increase energywith imported gas will increase energy

security both in terms of security of supplysecurity both in terms of security of supplyas well as security of price.as well as security of price.

The recent proposal from Qatar to bringThe recent proposal from Qatar to bring

gas exclusively to Pakistan, as well as thegas exclusively to Pakistan, as well as the

Iranian proposal which considers India asIranian proposal which considers India as

an essential component, could bean essential component, could be

considered.considered.


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C. Benefits of Gas Import (cont.)C. Benefits of Gas Import (cont.)

Advantages to RegionAdvantages to Region::

Shift towards gas-driven environment friendly energyShift towards gas-driven environment friendly energyeconomies.economies.

Strengthen regional cooperation and provide a foundation forStrengthen regional cooperation and provide a foundation forfuture economic growth throughout the region.future economic growth throughout the region.

Significant direct and indirect economic benefits during theSignificant direct and indirect economic benefits during theconstruction and over the life of the project throughconstruction and over the life of the project through

employment, transit fees, availability of clean fuel, economicemployment, transit fees, availability of clean fuel, economicand industrial growth.and industrial growth.

New business and investment opportunities.New business and investment opportunities.

C POTENTIAL GAS IMPORT SOURCE COUNTRIESC POTENTIAL GAS IMPORT SOURCE COUNTRIES


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C. POTENTIAL GAS IMPORT SOURCE COUNTRIESC. POTENTIAL GAS IMPORT SOURCE COUNTRIES(2003-04)(2003-04)

IranIran

Proven Reserves - 812 TCFProven Reserves - 812 TCF

ProductionProduction -1900 BCF-1900 BCFExportExport --

TurkmenistanTurkmenistan

Proven ReservesProven Reserves -101 TCF-101 TCFProductionProduction -790 BCF-790 BCF

Export - 590 BCFExport - 590 BCF

QatarQatar

Proven ReservesProven Reserves - 300 TCF- 300 TCFProduction - 690 BCFProduction - 690 BCFExport -168 BCFExport -168 BCF


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D. Improve GovernanceD. Improve Governance

GRA (Gas Regularity Authority) andGRA (Gas Regularity Authority) and

OGRA (Oil Gas Regularity Authority),OGRA (Oil Gas Regularity Authority),

established.established.

HOLDCO operational.HOLDCO operational.

Department of Petroleum and EnergyDepartment of Petroleum and Energy

Resources being restructured toResources being restructured to

perform policy formulation andperform policy formulation and

coordination functions.coordination functions.


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E. Promote Foreign InvestmentE. Promote Foreign Investment

Investor friendly Petroleum Exploration andInvestor friendly Petroleum Exploration and

Production Policy 2001 announced in MayProduction Policy 2001 announced in May

20012001 Investment of US$ 978 million has been committedInvestment of US$ 978 million has been committed

since October 1999 which includes:since October 1999 which includes:

ExplorationExploration US$ 73 millionUS$ 73 million

Gas Fields DevelopmentGas Fields Development US$ 505 millionUS$ 505 million

Oil PipelinesOil Pipelines US$ 278 millionUS$ 278 million

MarketingMarketing US$ 55 millionUS$ 55 million

Local InvestmentLocal Investment US$ 67 millionUS$ 67 million


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F. Improve EnvironmentF. Improve Environment

Increasing natural gas use to replaceIncreasing natural gas use to replace

fuel oil in power generation, andfuel oil in power generation, and

petrol/diesel in transport by CNGpetrol/diesel in transport by CNG

Doubling the availability of LPGDoubling the availability of LPG

Improving petrol and diesel oilImproving petrol and diesel oil

specificationsspecifications


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Some Options forSome Options forPakistansPakistans

Energy SectorEnergy Sector


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Oil & GasOil & Gas

Total potential estimated at about 27Total potential estimated at about 27billion barrels of oil and 282 trillion cubicbillion barrels of oil and 282 trillion cubic

feet of gas.feet of gas.

Only 737 million barrels of oil and 38Only 737 million barrels of oil and 38trillion cubic feet of gas have so far beentrillion cubic feet of gas have so far beendiscovered.discovered.

Major future discoveries of oil and gas willMajor future discoveries of oil and gas willcome from the offshore, Balochistan andcome from the offshore, Balochistan andDumber Block of Kirthar.Dumber Block of Kirthar.


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Shift to GasShift to Gas

A shift to gas is the least cost andA shift to gas is the least cost and

preferred option for:preferred option for:

Economic BenefitsEconomic Benefits

Security of Energy SuppliesSecurity of Energy Supplies

Societal EquitySocietal Equity

Environmental ImprovementEnvironmental Improvement

Strategic Regional CooperationStrategic Regional Cooperation


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Compressed Natural Gas (CNG)Compressed Natural Gas (CNG)

After successful introduction ofAfter successful introduction of

natural gas as transport fuel tonatural gas as transport fuel to

replace petrol, policy actions arereplace petrol, policy actions are

being formulated to promote largebeing formulated to promote largescale replacement of diesel oil byscale replacement of diesel oil by

CNG.CNG.


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Oil Refining and InfrastructureOil Refining and Infrastructure

Options be evaluated of putting upOptions be evaluated of putting up

new refineries by value addition ofnew refineries by value addition of

the existing refineries if the energythe existing refineries if the energy

mix ratio of oil to gas (presentlymix ratio of oil to gas (presentlyabout 60/40) is to shift in favor ofabout 60/40) is to shift in favor of

gas to say 70/30 or 80/20.gas to say 70/30 or 80/20.


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Coal (2003-04)Coal (2003-04)

Thar field is the 5th largest (185 billionThar field is the 5th largest (185 billion

tonnes) coal field in the world but hastonnes) coal field in the world but has

remained un-exploited.remained un-exploited.

Current production of coal 3.5 millionCurrent production of coal 3.5 milliontonnes per year, constituting less than 5%tonnes per year, constituting less than 5%

of our present energy mix.of our present energy mix.

Coal must come into immediate focus forCoal must come into immediate focus for

power generation, and industrial,power generation, and industrial,

commercial and domestic use.commercial and domestic use.


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COAL CONSUMPTION PATTERN OF PAKISTAN

BrickKilns

53%

Coke

23%

Power

4%

Cement

20%


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Coal Reserves & ProductionCoal Reserves & ProductionInIn

Million TonnesMillion Tonnes

ProvinceProvince Reserves AnnualReserves AnnualProductionProduction

SindhSindh 184,123184,123 0.9780.978

PunjabPunjab 256256 0.4000.400

BalochistanBalochistan 196196 1.6731.673

NWFPNWFP 8181 0.0410.041

----------------------------------------------------------------------------------------------

Total:Total: 184,656184,656 3.0923.092


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Strategy to Increase Coal UseStrategy to Increase Coal Use

Policy Statement:Policy Statement:

- Share of indigenous coal in energy mix at- Share of indigenous coal in energy mix atnational level to be enhanced from presentnational level to be enhanced from present4.5% to 20%4.5% to 20%

Long Term Measures:Long Term Measures:

- Secure private investment for exploitation- Secure private investment for exploitationof Thar.of Thar.

- Feasibility studies to establish coal based- Feasibility studies to establish coal basedthermal power plantthermal power plant

(Contd..)(Contd..)


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Immediate Measures:Immediate Measures:

- Conversion of processing industry on coal- Conversion of processing industry on coalthrough policy incentives.through policy incentives.

- Study utilization of coal for town gas.- Study utilization of coal for town gas.

- Study in-situ gasification of Thar coal fields.- Study in-situ gasification of Thar coal fields.

- Preparation of mining feasibility study on- Preparation of mining feasibility study onThar coal.Thar coal.

- Provincial Government to develop- Provincial Government to developinfrastructure in coal fields .infrastructure in coal fields .


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Enviromental Issues:Enviromental Issues:

Damages to the environment, can either be knowingly orDamages to the environment, can either be knowingly or

unintentionally.unintentionally.

Directly effect on human life in the region.Directly effect on human life in the region.

Oils spill over effect.Oils spill over effect.

Air emission.Air emission.


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Enviromental Issues: (contd.)Enviromental Issues: (contd.)

Liquid waste.Liquid waste.

Soil contamination.Soil contamination.

Extinction of plants and species.Extinction of plants and species.


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WTO Effect :WTO Effect :

Pakistan will be benefiting from thePakistan will be benefiting from the

implementation of WTO.implementation of WTO.

Free trade of oil and gas.Free trade of oil and gas.

Beneficial for Pakistan as it is heavilyBeneficial for Pakistan as it is heavily

dependent on oil and gas import.dependent on oil and gas import.

Reduction in cost of products.Reduction in cost of products.

Change in infrastructure by import ofChange in infrastructure by import of

technological goods.technological goods.


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The EndThe End

Documents

Oil and gas Ind 3