ISLAMABAD, April 19: The government on Thursday granted an exploration licence to state-run Government Holdings Private Ltd. (GHPL) for an offshore block in the Arabian Sea, the Ministry of Petroleum and Natural Resources said.

The government also signed petroleum production-sharing agreement with GHPL and the state-run Oil and Gas Development Co. Ltd. (OGDCL) for the Indus-R offshore block, covering an area of 1,402 sq km (541 sq miles), the ministry said.

OGDCL – Pakistan’s biggest listed firm - will spend up to $1.13 million during the first two years on exploration in the licence area, it said. The country’s liberal exploration policy has attracted interest from foreign firms in recent years, making oil and gas one of the largest foreign investment areas.

Total of France and Austrian OMV are among the foreign firms involved in exploration and production of hydrocarbons.

The government has set a target of drilling 100 exploration wells each year, compared with an average of 60 a year previously.

However, most offshore wells drilled by Pakistani and foreign firms have turned out dry.

Total, Pakistan's Petroleum Ltd. and Premier Oil Pakistan made unsuccessful attempts in the past few years to find hydrocarbons in deep water off Karachi.

Pakistan imports 85pc of its energy needs, including over $6.5 billion worth of oil a year, and aims to increase domestic oil production from about 65,000 barrels per day.—Reuters