December 4, 2003	Thursday	Shawwal 9, 1424

ISLAMABAD, Dec 3: A consortium led by Shell Development and Offshore Pakistan, a subsidiary of Anglo-Dutch Shell Group, has started exploring oil and gas in Pakistan’s Indus

Delta — the first attempt to prospect in country’s unexplored deep waters.

The results of the seismic survey and exploration will be known in the next five to six months, said G.A. Sabri, director general of petroleum concessions at the ministry of petroleum and natural resources.

“We think this area is potentially lucrative, and we plan to award more contracts for exploration,” Mr Sabri told Dow Jones Newswires in an interview.

Pakistan this year awarded two offshore drilling contracts to multilateral consortiums led by Shell and French Total. Total is expected to start drilling in March-April of the next year.

Premier Oil Pakistan and Kuwait Foreign Petroleum Exploration also farmed into the Shell block in the Indus basin, 150 km south of Karachi.

The joint venture partners are expected to invest a total $12 million in the exploration phase, Mr Sabri said, adding the exploration activity in the second block operated by Total has been delayed due the unavailability of rigs.

The Total-led consortium, which also includes Malaysia’s Petronas and Austria’s OMV, is expected to invest $30 to $40 million in drilling its ultra deep well in blocks G and H, which cover a combined area of 15,000 square kilometres and are located some 300 km from Karachi.

Pakistan signed an offshore oil exploration deal with Total in July this year that could bring the investment up to $3 billion if a significant discovery is found.

Mr Sabri said the government had advertised another 2,500-square-km offshore block near Karachi for which bidding will be held on December 22.

The government has also awarded 8,500 square kilometres block to state-run Pakistan Petroleum Ltd along the coastline of Balochistan.

Pakistan currently imports around 85 per cent of its oil needs, and so far oil exploration has concentrated mainly onshore.

Mr Sabri said exploration activity in Pakistan had picked up and companies drilled 77 wells in the last fiscal year that ended on June 30, almost double the previous year’s level.

“We plan to sign 15 new exploration licenses by the close of the current fiscal year,” he said.

Mr Sabri said Pakistan’s new exploration policy had been a major factor in attracting foreign companies to undertake exploration activity.

Under the policy, which was announced in late 2001, the government has done away with the mandatory 15 to 20 per cent sharing policy, has given new price incentives, and has allowed the exploration firms to develop infrastructure with distribution firms to bring oil or gas to supply centres.

“This incentive is now forcing transmission and distribution companies to speed up laying infrastructure and commercialize discoveries as soon as possible,” said Mr Sabri.—Dow Jones Newswires