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Every bit counts

September 23, 2012

THE Italian oil major Eni SpA has announced a “significant” gas discovery in Sindh. The size of the find is estimated to be 300-400 billion cubic feet of gas. The company is in discussions with the country’s oil and gas regulator to speed up production from the discovery. Given Pakistan’s existing reserves of 27.5 trillion cubic feet, the daily production of 20mmcfd from the new discovery will represent less than 0.5 per cent of the total national output of over 4,000mmcfd. Little wonder then that the petroleum secretary has dismissed the company’s claim about the significance of the find as ‘exaggerated’.

Exaggerated it may be, but insignificant it isn’t in view of the country’s fast-depleting gas reserves. Total reserves had depleted by 5.5 per cent at the end of 2011 from a year earlier since no new discoveries had been made since 2005 because investors were reluctant to put their money in exploration due to gas-pricing issues and security concerns in areas with potential gas finds. The demand, on the other hand, by domestic, transport, power-sector and industrial consumers has risen heftily. The supply gap has already widened to over 500mmcfd in summer and is projected to expand to 1,500-1,800mmcfd during the fast-approaching winter. This means industry will not have enough gas to operate its plants, and domestic users will be coping with low pressure as temperatures fall in the months to come. Power producers will be dependent on imported oil for generation and we will still be facing long blackouts. The solution to the endemic energy crisis crippling our economy lies in encouraging new explorations, no matter how small these may be. The government in the meanwhile should speed up work on LNG import as a short-term measure to reduce the gas deficit in the winter and to keep the wheels of the economy rolling.