ISLAMABAD, Sept 2: The federal government has approved Oil and Gas Development Corporation Limited’s (OGDCL) “Revised Development of Oil and Gas Resources Project” to drill 41 exploratory wells at a cost of Rs11.8 billion.

Official sources said here on Tuesday that now under the revised programme additional 13 wells will be drilled due to which the capital cost of the project has increased by 23 per cent from Rs9.6 billion to Rs11.8 billion.

The authorities of the OGDCL have been asked to finalize the development plan of each of the discoveries and submit to the Planning and Development Division. The OGDCL assured that it has a cash balance of Rs14.9 billion to finance the proposed project.

The project envisaged drilling of 41 exploratory/appraisal wells along with geophysical/geological studies in five years. OGDCL has already completed the work approved in the original scope of the project and has made six oil and gas discoveries.

OGDCL has also strengthened its Prospect Generation Department under the project which has improved their monitoring and petroleum prospect/appraisal capabilities.

The officials of the Corporation has also informed the Planning and Development Division that the total indigenous oil production in the country was about 65,000 barrels per day (bpd), out of which OGDCL contribution was 23,000 bpd from its own fields/concessions, whereas 9,000 bpd come from different joint ventures as a share of OGDCL.

The current level of gas production is 2.5 billion cub.ft per day. The OGDCL’s contribution is around 39 per cent of the total gas production in the country.

The Planning and Development Division has also appointed three-member committee, comprising secretary Ministry of Petroleum and Natural Resources, secretary Planning and Development Division and Additional Chief Secretary Balochistan, to ensure acceleration in the oil and gas exploration activities in tribal areas of Balochistan.

Exploration activities in the tribal areas could not be continued due to the problems of not having safe access particularly in Marri, Bugti and Mengal areas.

A meeting held under the chairmanship of President Gen. Pervez Musharraf on 11/9/2001 had decided to resume petroleum exploration/production activities in tribal areas of Balochistan by taking local tribal chiefs into confidence by starting social welfare development programmes. The measures had included raising of special levy force of 1,000 men equipped with modern weapons by the government of Balochistan, sinking of 1,200 tubewells for irrigation and drinking, levelling of land and rehabilitation/shifting of Mari Tribesmen. Out of total cost of Rs980 million of the projects, Rs440 million was to be financed by the government of Balochistan.

However, the ministry of petroleum maintained that since the government of Balochistan has declined to finance their share of the cost of the project, it was becoming difficult to ensure smooth oil and gas development activities in the province.

The Planning and Development Division stated that in order to continue the project, an allocation of Rs150 million has already been made in the PSDP 2003-04. Therefore, the work on the project should be undertaken immediately and that the centre would provide the required funding.