ISLAMABAD, Oct 6: The World Bank has estimated that original recoverable gas reserves in Pakistan are much more than official estimates of 42 trillion cubic feet which needed to be explored and developed through hi-tech surveys and negotiations with the local population.

The Bank has asked the government to negotiate a new revenue sharing agreement with tribal leaders, the people at large in Balochistan besides the oil companies to conduct petroleum exploration and production activities without law and order problem, a senior government official told Dawn on Monday.

The Bank has also pointed out that a concerted effort should be made to exploring stratigraphic and more subtle traps which could add substantial oil and gas reserves because most of the structural traps have already been drilled.

“Efforts in this regard may add substantial reserves, and incentives should be introduced to encourage the use of the advances in seismic acquisition and processing techniques,” the official said, quoting a recent communication from the World Bank.

The Bank has also called for carrying out promotional surveys, such as, aero-magnetic, gravity and seismic, preferably through joint ventures with the private sector to attract industry interest into areas whose petroleum potential remains to be established.

The Bank says that there is no question that the petroleum potential of Pakistan is far from established, given frequent discoveries, some significant. Original recoverable gas reserves have increased from 31.2tcf (trillion cubic feet) in 1992 to 41.9tcf in 2002.

Pakistan’s individual prospects, except for the offshore, however, are not of the size that will attract the major oil companies. Hence, for the most part, only mid-sized international independents are active in Pakistan, together with an important presence of local investors.

Notwithstanding that at present 160,000 sq km, of which 36,000 sq km in the offshore, are under contract, there is still need to accelerate exploration investments, given in particular the rising demand for gas.

The Bank said analysis of the existing contracts revealed that the average government intake in Pakistan amounted to 45 to 50 per cent, which was on the lower side by international standards, but reasonable considering prospectivity, perceived political risk and desirability to attract investments.

The government has been advised to ensure consistency and stability in gas producer pricing policies, so that new discoveries are brought to the market with minimal delays and facilitate access to foreign exchange for domestic companies having resources, capabilities and track record to explore for and develop gas reserves.

The Bank has also asked the government to facilitate the administrative environment under which investors operate, particularly by having directorate of petroleum concessions actively facilitate transactions with the customs, tax and other administrative bodies.