ISLAMABAD, Aug 30: The oil and gas sector, due to major reforms introduced during the last two and half years, has so far benefitted the economy to the tune of Rs25 billion.

According to official sources, following the policy decisions in the oil and gas sector, the process of exploration and development was accelerated and concrete measures were taken to encourage foreign investment.

In 2002-03, the size of foreign investment is likely to touch the figure of $1 billion in the oil and gas fields.

The development work at recently discovered, large reservoirs of gas was expedited.

Through this way, the petroleum production sector at local level has been improved from 55,000 bpd to 66,000 bpd.

Oil and Gas Regulatory Authority (OGRA) has been established to determine the prices of oil and gas in the country.

OGRA will review petroleum prices every six months keeping in view the international oil prices. For the first time, petroleum prices in the country are moving with the international prices.

Prior to this system of price adjustment, which was introduced in July the last year, the sources said, the country’s kitty had to contribute Rs12 billion every year to provide cushion to oil prices.

The government was paying this amount as subsidy to keep the prices of petroleum products stable for a period of one year.

But, now this burden has been removed from the national exchequer, the sources added.

The government has reviewed the oil and gas policy to increase exploration activity and enhance indigenous production.

In this regard, about 100 wells will be drilled during the current year, while in previous years only 30 wells could be drilled.

Pakistan has great potential in oil and gas, however, presently only 15 per cent potential is being used, the sources added.

Presently out of 25 exploration companies, 21 belonging to foreign countries are working in the oil and gas sector in the country.

The sources said upstream infrastructure including pipeline was developed for efficient transportation of petroleum products.

In this regard, the government has launched the gas infrastructure development project to increase its production by one billion cubic feet per day.

About 40 per cent work on the project has been completed which would increase 35 per cent of total gas production. The remaining work will be completed by December next year.

Referring to the import bill of $3 billion in the oil sector, the sources said, efforts are on to save over $700 million by adopting substitution policy.

The government is vigorously endeavouring to provide cheaper sources of energy as alternative to the expansive sources.

Quoting examples, the sources said, the furnace oil is being substituted by natural gas and diesel and petrol by CNG.—APP