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Adviser warns of gas shortage

October 02, 2012

Prime Minister’s Adviser on Petroleum and Natural Resources Dr Asim Hussain said “This is going to be a tough winter” this year in terms of gas shortage. — File Photo

ISLAMABAD: Prime Minister’s Adviser on Petroleum and Natural Resources Dr Asim Hussain has forecast “a tough winter” this year in terms of gas shortage and described completion of a gas field in Sindh as a success of the petroleum policy 2012 announced about a month ago.

“This is going to be a tough winter,” he said at a news conference on Tuesday.

When reminded that he had talked about a smooth winter only a month ago, Mr Hussain said the coming winter would be difficult but the government would try to ensure better management this year.

He said the government was ready to award 50 exploration licences to domestic and foreign exploration and development companies, of which four blocks would be awarded to Kuwait, Russia and China on a government-to-government basis while the rest would be open to competitive bidding.

He said one exploration block each to Russia and Kuwait and two to China had almost been finalised.

He said unlike the petroleum policies of 2001 and 2004 which were almost non-starters, the policy announced in 2012 had started producing results.

He said a number of companies which had completed exploration work did not announce their discoveries because of unattractive prices, but were now ready to start production and supply.

He said the ENI of Italy had announced 300-400 billion cubic feet of gas reserves at Bhadra gas field near Bhit in Sindh. About 30mmcfd of gas will soon start flowing into the system from Bhadra.

“They have been waiting for the new policy that provided better prices.”

When asked that if the 2001 and 2004 policies were failures then how many new exploration blocks were auctioned over the last four and a half years of PPP rule, the minister said 52 licences were auctioned in four years. But he agreed that in some cases more than 50 licences had been awarded in years before 2008.

An official said that in normal circumstances, success or failure of a petroleum policy could be determined initially on the basis of the number of award of exploration licences, drilling of wells and ultimately in 7-9 years when such fields come into production.

Asked why the government did not adopt legal course as required under the law against companies which kept sitting on reserves already found and did not bring hydrocarbon resources to the system when the country faced shortages, Dr Hussain said the government had to be practical instead of pushing away the companies by penalising them.

At the same time, he said the government had taken action against some of non-performing companies and cancelled four licences.

He said the production from Nashpa oilfield in Khyber Pakhtunkhwa which recently came into production would increase domestic oil production to 90,000 barrels a day from 68,000 barrels.

The country’s total oil requirement currently stands at 380,000 barrels a day which means that almost one fourth of the requirement would be met with domestic production.

Mr Hussain said the direction of the energy sector had been set right and Pakistan would be out of the energy mess in four years.

By September next year, about one billion cubic feet of additional gas would be put into the system that would solve most of the pressing problems the country.

He said the international audit results had confirmed about 51 trillion cubic feet (TCF) of shale gas in the country for which a new policy would be unveiled soon.

Currently, Pakistan’s total proven reservoirs stand at 23 TCF.

Likewise, another 28 TCF of low-BTU gas has also been confirmed that will now be used for power generation.

He said this resource was earlier not being put into productive energy.

Another 20 TCF of tight gas has been estimated in Balochistan, Sindh and Khyber Pakhtunkhwa and three fields will start supplying gas in the third quarter of next year.

He said that for the first time the petroleum policy had provided separate prices for low-BTU, shale and tight gases that would go a long way in revitalising the energy sector.