ISLAMABAD, Feb 24: The drilling started by Pakistan Petroleum Limited (PPL) in the Makran Coast last Friday for petroleum well is going to cost an extra $10 million as compared to the costs of drilling done by other exploration companies in the same area few years back, sources told Dawn here on Wednesday.

They said the well being drilled by the PPL in the Makran Coast will cost $25million as compared to the other two drilled by Ocean Pakistan Limited and Government Holding (Private) Limited (GHPL) in the shallow waters of the Pasni and Gawadar blocks with a total cost of about $27million only.

The depth of the two wells was 11,700 feet and 12,500 feet, while the one being drilled by the PPL had almost the same depth, they said. In 2003, Ocean Pakistan Limited decided to leave the area and their interest was transferred to PPL, which has now decided to drill the same type of well but with a cost reaching almost double, the sources said.

They also alleged that the PPL's management was involved in massive kickbacks from the contractors in this particular case and demanded investigations into the matter.

When contacted, Managing Director, PPL, Munsif Raza dispelled the impression of any kickbacks and said that the PPL's well was to cost $20 million and not $25million. The cost of the well being drilled by the PPL was a bit higher as compared to the other two because they were dug some five years back when the ratio of inflation was not that high.

Nowadays, he said, the prices of each and every item used in the drilling process had almost doubled as compared to their rates four or five years ago. "Five years back a barrel of oil cost $10 but now it costs $50. Nowadays everybody wants to drill, however, it is not that easy," said Mr Raza, while justifying the increased cost of the well.

He also challenged the depth of the other two wells and said: "It is not correct...the other two wells were about 3,500 feet each and similar is the range of the one being drilled by the PPL."

When asked whether there were any technical difference between the other two wells and the one being drilled by the PPL, he said both were the vertical drilling with a little bit of angle.

Mr Raza said as both the wells had been drilled by the same companies therefore, the cost of the second well was lower as compared to the one drilled earlier because, of the less mobilization cost due to the already available infrastructure left from the first well.