Energy Year Book 2005-06

7/31/2019 Energy Year Book 2005-06

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GOVERNMENT OF PAKISTANMINISTRY OF PETROLEUM

&NATURAL RESOURCES

ISLAMABAD

YEAR BOOK2005-2006


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Table of Contents Pages

Chapter 1: General

1.1 Introduction 11.2 Mission Statement 11.3 Functions of the Ministry 11.4 Organization of the Ministry 21.5 Website of the Ministry 41.6 Prime Ministers Directive Goals and Targets 4

Chapter 2: Activities, Achievements and Progress during FinancialYear 2005-06

2.1 Development Wing - Ministry 52.2 Mineral Wing - Ministry 82.3 Policy Wing - Ministry 12

2.3.1 Directorate General of Petroleum Concession 12

2.3.2 Directorate General of Oil 152.3.3 Directorate General of Gas 18

2.4 Contribution in October 8th Earthquake 262.5 Achievements of Public Sector Departments /Organizations

During Financial Year 2005-2006 and Targets for Financialyear 2006-2007 26

Chapter 3: Attached DepartmentGeological Survey of Pakistan 27

Chapter 4: Autonomous BodyHydrocarbon Development Institute of Pakistan 34

Chapter 5: Companies5.1 Oil and Gas Development Company Limited. 385.2 Sui Northern Gas Pipeline Limited. 495.3 Sui Southern Gas Company Limited. 545.4 Pakistan State Oil Company Limited. 615.5 Pakistan Petroleum Limited. 685.6 Pak Arab Refinery Company Limited. 785.7 Saindak Metal Limited. 845.8 Lakhra Coal Development Company. 885.9 Government Holding (Pvt) Limited. 925.10 Pakistan Mineral Development Corporation (Pvt) Limited. 985.11 Inter State Gas Systems (Pvt) Limited. 104

AnnexureI Organizational Chart of the Ministry 106II Public Sector Organizations under the Ministry 107III Sanctioned Strength of the Ministry 108IV Goals and Targets Financial Year 2006-07 110V Puclic Sector Development Program 2006-07 114


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PREFACE

This report has been prepared in pursuance of Sub Rule (2) of Rule 25 of the Rules of

Business 1973 which provides that at the beginning of each financial year, each Division

shall, for the information of the Cabinet and information of general public prepare as a

permanent record, a Book which shall contain:

a. the detail of its activities, achievements and progress during thepreceding financial year giving only the unclassified information whichcan be used for reference purposes;

b. the programme of activities and targets set out for the Ministry for thepreceding financial year and the extent to which they have beenrealized; and

c. the relevant statistics properly tabulated.

The report shows the activities, achievements and progress of the Ministry of Petroleum

and Natural Resources, its attached department and organizations/companies under its

administrative control, during FY 2005-06. Goals and Targets approved for FY 2006-07

have also been included in the report.

I hope that this book will serve as a useful reference document.

Islamabad: 30th September 2006 (Ahmad Waqar)Secretary


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CHAPTER 1

GENERAL

1.1 INTRODUCTION

Ministry of Petroleum and Natural Resources was created in April 1977. Prior tothat, the subjects of Petroleum and Natural Resources were part of the Ministry of Fuel,Power and Natural Resources.

1.2 MISSION STATEMENT

To ensure availability and security of sustainable supply of oil and gas foreconomic development and strategic requirements of the country and to coordinatedevelopment of natural resources of energy and minerals, in order to cater for energyneeds of the people of Pakistan.

1.2.1 STRATEGY TO ACHIEVE MISSION

i. To adopt an integrated approach for promoting exploration and fasttrack development of oil, gas and mineral resources.

ii. To deregulate, liberalize and privatize oil, gas and mineral sectorsthrough structural reforms.

iii. To attract private investment and to establish credible institutionsfor facilitating the development of petroleum and mineral sectors.

iv. To develop technical and professional human resource.

v. To optimize existing energy delivery infrastructure (oil/gaspipelines).

vi. To substitute imported fuel oil with indigenous gas by optimallybalancing the gas availability and supplies from local and importedsources.

1.3 FUNCTIONS OF THE MINISTRY

The Ministry is responsible for dealing with all matters relating to petroleum,gas and mineral. Its detailed functions as per the Rules of Business are as under:

1 All matters relating to oil, gas and minerals at the national andinternational levels, including:i. policy, legislation, planning regarding exploration, development

and production;ii. Import, export, refining, distribution, marketing, transportation and

pricing of all kinds of petroleum and petroleum products. (Pricingof all kinds of petroleum and petroleum products are determined by


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Oil and Gas Regulatory Authority w.e.f 01.04.2006).iii. matters bearing on international aspects;iv. Federal agencies and institutions for promotion of special studies

and development programms.2. Geological Surveys.3 i. Administration of Regulation of Mines and oil fields and Mineral

Development (Federal control) Act, 1948, and rules made thereunder, in so far as the same relate to exploration and production ofpetroleum, transmission, distribution of natural gas and liquefiedpetroleum gas, refining and marketing of oil;

ii. Petroleum concessions agreements for land, off-shore and deep seaareas;

iii. Import of Machinery, equipment, etc; for exploration anddevelopment of oil and natural gas.

4. i. Administration of Marketing of Petroleum Products (FederalControl) Act 1974 and the rules made there-under;

ii. Matters relating to Federal investments and undertakings wholly orpartly owned by the Government in the field of oil, gas andminerals, excepting those assigned to the Industries and ProductionDivision.

5. Administration ofi. The Petroleum Products (Development Surcharges) Ordinance,

1961, and the rules made there-under;ii. The Natural Gas (Developmetn Surcharges) Ordinance, 1967, and

the rules made thereunder; andiii. The ESSO Undertakings (Vesting) Ordinance, 1976.

6. i. Coordination of energy policy, including measures for conservationof energy and energy statistics;

ii. Secretariat of National Energy Policy Committee.

1.4 ORGANIZATION OF THE MINISTRY

To perform its functions, the Ministry of Petroleum & Natural Resources hasbeen organized into four wings i.e. Administration, Development, Mineral and Policy.The Ministry has one Attached Department, one Autonomous Bodyand 11 companies.The Secretary is assisted by an Additional Secretary, two Senior Joint Secretaries andfive Director Generals. Organizational chart of the Ministry and its public sectororganizations are placed at Annexure-I and II while the staff strength of the Ministry is atAnnex-III.

1.4.1 ADMINISTRATION WING

Administration Wing consists of a Senior Joint Secretary, two DeputySecretaries and seven Section Officers along with the support staff. The Wing isresponsible for the following functions:

i. Personnel and General Administration of the Ministry (Secretariat). Allmatters relating to Administration of the Policy Wing, Oil and Gascompanies, Geological Survey of Pakistan (GSP), Pakistan Mineral


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Development Corporation and Hydrocarbon Development Institute ofPakistan.

ii. Corporate affairs of oil and gas companies.iii. All matters relating to technical assistance, tours and training.iv. Coordination work of the Ministry and its attached departments,

organizations with other ministries.v. Processing of non-development budget of the Ministry and its attached

departmentvi. All matters relating to web site and networking of the Ministry.

vii. Coordination work related to P&NR committee on defence planning.viii. All matters relating to the Parliament Bussiness.

1.4.2 DEVELOPMENT WING

This wing comprises of one Senior Joint Secretary, two Deputy

Secretaries and four Section Officers along with the complementary staff.Development Wing is responsible for all matters other than admin and personnelmanagement of Policy Wing, GSP, GHPL, OGDCL, SNGPL, SSGCL, ISGCL,HDIP, PARCO and PSO, Oil and Gas infrastructure processing/approval andmonitoring of development schemes; foreign aid/loan and coordination withWorld Bank, ADB, CIDA, IDB, JICA; Joint Ministerial Commissions, ECO &bilateral relations; Preparation of Development Budget (PSDP), long term plans,Economic Survey & Budget speeches; All policy matters, ECNEC, ECC, CCOI,CCOP, Cabinet and implementation of decisions; and Foreign investment,privatization, import of natural gas projects.

1.4.3 MINERAL WING

This Wing has one Director General, two Directors and two DeputyDirectors along with their complementary staff. The Wing is responsible for alldevelopment schemes of Geological Survey of Pakistan (GSP), Pakistan MineralDevelopment Corporation (PMDC), Saindak Metals Limited (SML) and LakhraCoal Development Company (LCDC) and Thar Coal Development Project inco-ordination with Provincial Government concerned.


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1.4.4 POLICY WING

The Policy Wing is comprised of (i) Directorate General of Petroleum

Concessions (ii) Directorate General of Oil (iii) Directorate General of Gas and(iv) Directorate General of Admn /Special Projects. Each Directorate is headedby a Director General. The Policy Wing is responsible for developing policiesfor oil and gas sectors, forecasting future requirement and assessing the impactof existing policies, rules and regulations.

1.4.5 ATTACHED DEPARTMENT, AUTONOMOUS ORGANIZATION,CORPORATIONS AND COMPANIES OF THE MINISTRY

The Ministry has one attached department i.e. Geological Survey ofPakistan (GSP) and following organizations / companies under its administrativecontrol:

i Hydrocarbon Development Institute of Pakistan (HDIP)ii Oil and Gas Development Company Limited (OGDCL)

iii Sui Northern Gas Pipeline Limited (SNGPL)iv Sui Southern Gas Company Limited (SSGCL)v Pakistan State Oil Company Limited (PSOCL)

vi Pakistan Petroleum Limited (PPL)vii Pak Arab Refinery Company Limited (PARCO)

viii Saindak Metal Limited (SML)ix Lakhra Coal Development Company (LCDC)x Government Holding (Pvt) Limited (GHPL)

xi Pakistan Mineral Development Corporation (Pvt) Limited (PMDC)xii Inter State Gas Systems (Pvt) Limited (ISGSL)

1.5

WEBSITE OF THE MINISTRY

The Ministry is regularly updating its website www.mpnr.gov.pk on the basis offeed back received from different stake holders.

1.6 PRIME MINISTERS DIRECTIVEGOALS AND TARGETS

In pursuance of the Prime Minsiters directive, the Ministry of Petroleum andNatural Resources has worked out Goals and rolling plans with quarterly targets since FY2004-05, and it is producing quantifiable and tangible results in the Petroleum EnergySector. During the year FY 2005-06 , 47 out of64 preset targets have been achievedsuccessfully. Besides on the rolling plan, the Ministrys working has been activated andenergized for establishing a culture of good governance, transparency and accountability.The Prime Minsiters Secretariat monitors the progress regularly.

1.6.1 The goals and targets set for the FY 2006-2007 of are at Annexure IV.


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CHAPTER 2

ACTIVITIES, ACHIEVEMENTS AND PROGRESS DURINGTHE YEAR 2005-06

2.1 DEVELOPMENT WING - MINISTRY

2.1.1 LIBERALIZATION OF OIL AND GAS SECTOR

i The public sector oil and gas entities have been made independent.The Board of Directors of these companies have been givencomplete autonomy to operate on commercial lines withoutinterference. As a result, the performance of the companies hasimproved significantly.

ii Imports of fuel oil and HSD have been deregulated.

iii Freight pool phased out and Furnace Oil has been removed fromfreight pool. Freight equalization of Petrol/HSD has been limitedto 29 depots.

iv Refinery Pricing Formula rationalized and linked with actualimport cost, to provide incentives for up-gradation/expansion ofexisting refineries.

v The prices and allocation of LPG deregulated. With theseincentives the production of LPG has risen to 1600 tons/ per day.

vi Consumer prices of Furnace Oil and White Oil products linked tothe international prices and adjusted on fortnightly basis.

vii Consumer prices of gas are reviewed bi-annually on the basis ofcost of supply. This will improve the confidence of foreign oil andgas producers and protect the gas utilities.

viii Subsidy given to domestic sector gas consumers is beingwithdrawn gradually. However, it has been ensured that a fixed40% subsidy (monthly consumption below 1900 cubic meter) willremain available to low income group who consume 50% of thetotal domestic sector gas. In this way, 40% of the 3.5 millionconsumers would not be affected by this change.


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2.1.2 EXPLORATION AND PRODUCTION (E&P) SECTOR REFORM

i Onshore and offshore policies were announced in May, 2001 andan incentive package was given to attract foreign investment in theupstream sector. The seismic surveys in offshore areas indicatetremendous potential of oil and gas. As a result, many multinational companies have shown interest in exploration in theseareas.

ii OGDCL has for the first time in Pakistans history made an oildiscovery in the NWFP Province. MOL, a Hungarian Explorationcompany, has also made a major discovery at Gurgry districtKohat N.W.F.P.

iii Due to pragmatic policies of the present government, since issued

in October, 1999 there have been investment commitments ofaround US $ 1 billion.

2.1.3 PRIVATIZATION OF PUBLIC SECTOR ENTITIES

NRL Privatised on 07-07-2005.

GOP has decided in principle to privatize PSOCL, OGDCL, PPL,SNGPL and SSGCL. Government has also divested its minorityshareholding in seven oil fields.

2.1.4 GAS DEVELOPMENT PLAN

i. One BCFD additional gas from new fields (Miano, Zamzama,Sawan, Bhit, Sui Deep, Hasna, Badin II) has been brought onstream through the Gas Infrastructure Development projectsundertaken by SNGPL and SSGCL.

ii. The thrust of governments policy is to replace furnace oil with gasin power generation with anticipated savings of US $ 600-700million annually.

2.1.5 ENVIRONMENTAL REFORMS

i Being a clean fuel Natural Gas share in energy mix is beingincreased to replace imported fuel.

ii LPG supply as an alternate fuel is being encouraged to protect theenvironment and to conserve fuel wood resources.

iii CNG is being encouraged in transport sector to improve urbanambient air quality and reduce carbon emissions. About 1000CNG stations are in operation and over 1 Million vehicles havebeen converted to CNG making Pakistan third largest CNG


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consumer in the world after Argentina and Italy. Efforts are alsobeing made to replace diesel with CNG.

iv Lead-free gasoline has been introduced w.e.f. 1-7-2001 to improvethe air quality well in advance of the date set by environmental anddonor agencies. Attock Refinery has started producing unleadedgasoline w.e.f. 1-7-2002.

2.1.6 REGULATORY REFORMS

i Oil and Gas Regulatory Authority (OGRA) Ordinance has beenpromulgated. OGRA will regulate the entire oil and gas sectorexcept for the award of petroleum concessions.

ii Government Holdings Company Limited has been established tomanage the Governments investments in the upstream sector.

2.1.7 REGIONAL GAS PIPELINES

i. Ministry of Petroleum and Natural Resources after assessing futuredemand/supply, concluded that indigenious gas reserves of thecountry will not be sufficient to meet the increasing demandbeyond 2010. The Ministry therefore is exploring the possibility toimport gas from the neighbouring countries that is Iran, Qatar, andTurkministran and is working on all of the possible options.

2.1.8 GAS IMPORT PROJECTS

i The Ministry of Petroleum and Natural Resources has been

pursuing the import of gas through pipeline and LNG projects fromthe neighbouring region that is Iran, Turkmenistan and Qatar.These projects are being actively discussed at different levelWorking Groups/Committees constituted from time to time.

ii In the last one year two meetings of Pakistan-Iran Working Groupand two meetings of Pakistan-India Joint Working Group havebeen held on Iran-Pakistan-India (IPI) gas pipeline project.

iii Similarly, 8th Steering Committee meeting of Turkmenistan-Afghanistan-Pakistan (TAP) Gas Pipeline Project was held inApril, 2005 in Islamabad and 9th meeting is being scheduled in the3rd/ 4th Quarter of October, 2005 in Ashgabat.

iv 1st meeting of the Technical Working Committee of MPNR andQatar Petroleum on GUSA gas pipeline project has been held inJune, 2005 in Doha, Qatar and 2nd meeting of the committee isbeing scheduled during the last week of September, 2005 inIslamabad.


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v Ministry has successfully completed Comparative Evaluation ofthe Gas Import Projects by appointing a consultant through AsianDevelopment Bank (ADB) to prioritize the available gas importoptions.

vi In order to ensure safe and secure world class pipeline and LNGimport projects, MPNR has already appointed a Financial Advisorfor LNG import and for transborder pipeline project, a separateFinancial Advisory Consortium is likely to be appointed, shortly.

2.1.9 Public Sector Development Programmes/Projects

Ministry of Petroleum and Natural Resoruces has been allocated asum of Rs. 929.92 million in PSDP for the Financial year 2006-07. Detail of on-going/new projects are at Annexure -V

2.2 MINERAL WING - MINISTRY

The geology of Pakistan is interesting and has all the environments for hostingworld class metallic mineral deposits. Regulatory regime for solid mineral falls underprovincial domain. However, generation of basic geological data remains the function ofFederal Government. The countrys expanding economy demands development ofindigenous resources.

2.2.1 ACHIEVEMENTS - SPECIAL INITIATIVES

i) Feasibility Study on Gasification of Thar Coal, DistrictTharparkar, Sindh

To harness large Thar coal deposits as alternate source of energy, the Ministryendeavored to explore utilization options. One of such option is determiningtechno-economic viability of converting coal into pipeline quality gas andextraction of high unit value chemicals. For conducting the study under adevelopment project an international consultant M/s Lurgi of South Africa hasbeen selected. The contract has been signed with consultant and work on theproject initiated. The study will be completed in around one year.

ii) Feasibility Study for development and exploration of Chechali ironore and commissioning of Steel Mill at Kalabagh

The project is aiming to ascertain techno-economic viability of utilizing iron orefor setting up of Steel Mill at Kalabagh. The study has been awarded to aChinese company M/s MCC. The contract agreement signed and company hasinitiated first phase of study i.e. economic viability on upgradation.


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iii) Strategy on Development and Exploitation of Gemstones

To tap full gemstone potential as a source of foreign exchange, and as a part ofimplementation of strategy on Mining, Cutting, Polishing and Marketing ofGemstones approved by the Cabinet, the Ministry has sponsored projectvaluing Rs.100 million for imparting training to locals of gem bearing areas ofNWFP, AJK and Northern Areas in flawless mining. The projects are beingimplemented by the Governments of NWFP, AJK and Northern Areas. Underthe project more than 250 locals of these areas have been trained in mechanizedmining, grading, processing of gemstones. Work on the projects is in progress.

iv) Basic Training in Gemstone Cutting and Polishing Centres inGilgit and Muzaffarabad

As a follow up of the strategy for developing cutting and polishing skill in gembearing area it was decided to establish two training centers at Muzaffarabad

and Gilgit. Under the project codal formalities have been initiated to select aconsultancy firm having developed expertise in gemstone cutting and polishing.

v) Review of National Mineral Policy

The review of existing National Mineral Policy is aimed at improving in order tomeet new challenges for investment in Mineral Sector. The consultants havecompleted work on the revision and submitted draft Mineral policy. TheMinistry has sought views and comments from the provinces and otherstakeholders. The comments from provinces/stakeholders will be incorporated tofinalize the policy.

2.2.2 Restructuring of the Federal Mineral Sector Organizations

i. Restructuring of Geological Survey of Pakistanii. Restructuring of Pakistan Mineral Development Corporation

(PMDC)iii. Privatization of PMDC Projectsiv. Evaluation of Nokundi iron ore through Bolan Mining Enterprisesv. The Ministry has secured international assistance (World Bank)

for development of Mineral Sector in the following areas:a) Capacity building Institutional Strengtheningb) Generation of basic geological datac) Development of Small Scale Mining (SSM) in

gemstones/coald) Development of exploration targets into investment

opportunities.

2.2.3 INTERNATIONAL INVESTMENT FACILITATED INMINERAL SECTOR

As per policy of the present government and approved NationalMineral Policy the role of public sector organization in the mineralsector has been curtailed. Ministry of Petroleum & Natural Resources is


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facilitating private investment for the development of mineral sector.Following are the major projects initiated through facilitation by thisMinistry:-

i. Expansion of Saindak Copper Gold Project Balochistan

Keeping in view the better metal prices in international marketthe Chinese company M/s MCC signed an agreement withSaindak Metals Limited to expand the Saindak Projectenhancing the present capacity by 30% with capitalinvestment of US$ 22 million.

ii. Development and exploitation of Dudder Lead ZincProject (Balochistan)

With the concerted efforts of the Ministry of Petroleum and

NR an agreement has been signed between PMDC and MCCChina for the development of Dudder Lead Zinc project.MCC would invest about US$ 72 million for minedevelopment and commercial exploitation. According toagreement the project will produce 100,354 tones Zinc and32,584 tones Lead concentrate during 14 years mine life.Work on the project has started. Mineral Wing iscoordinating/facilitating Chinese Company in construction ofproject.

iii. Facilitation in Development of Rokodik Copper-GoldProject Balochistan

To develop Reko Diq Copper deposit in Balochistan, anAustralian company M/s Tethyan Copper Company hasfinalized feasibility study of the starter project aiming toproduce 40,000 tones of pure copper with an investment of$ 200 million. As a result of extensive drilling in the areaabout 167 million tones copper ore reserves have been proved.Filed studies to assess social and environmental impact of theproject has also been completed. Due to large size of thedeposit, world largest copper & gold producing companies;M/s Antogagasta & Barrick Gold have taken over 100%Australian shares of the TCC. The new management hasdecided to launch a mega project with an investment of overUS$ one billion by 2010. The mega project would produce2,50,000 tonnes of copper annually, thus bringing Pakistan forthe first time on the major copper producing country on worldmap.

iv. Development of Thar coal as alternate source of energy

For commissioning of 1000 MW power plant on specificBlock in Thar Coal fields a Mining feasibility study was


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prepared with the cooperation of Ministry of Petroleum & NRby international consultant M/s Rheinbraun of Germany. Forcommissioning of integrated coal mining and commissioningof 1000 MW power generation project an American firm AEShas been assigned a coal block at Thar. The Feasibility Studyprepared by German firm has also been given to M/s AES forevaluation and decision to take up the project.

v. Commissioning of Integrated Coal Mining andestablishment of coal fired power plants in coal fieldSindh

To increase share of coal in energy mix, Govt. of Sindh hasleased out a coal block to M/s Fateh Group of Hyderabad forcommissioning a coal based power plant of 250 MW atLakhra. Govt. of Pakistan/Sindh has allowed a Chinese

company M/s China National Chemical Engineering Group ofCorporation (CNCEC) to conduct feasibility study on a coalblock in Sonda Jherrick coalfields in Sindh province forintegrated mining project of 1 million ton and commission250 MW coal based power plant.

For establishing integrated coal mining and commissioningof 200 MW power plant an other coal block has been assignedat Sonda Jherrick coalfield, to M/s Dadabhoy HydrocarbonLtd. by Govt. of Sindh.

vi. Exploration of Copper-Gold in Balochistan

An Australian mining company M/s Lake Resources remainedengaged in conducting exploration for gold and other basemetals in District Chagai, Balochistan. Keeping in view thebetter prospects of the project the company has decided tostart exploratory drilling in the area.

2.3 POLICY WING MINISTRY

2.3.1 DIRECTORATE GENERAL OF PETROLEUM CONCESSIONS

i. Concession Activities

a Exploration LicencesOne hundred and forty-four applications for grant of

Exploration Licences were processed during 2005-06 whichincluded seventy applications received during the year. Ninebidding rounds were held in which thirty nine blocks wereoffered. As a result thirty three Exploration Licences coveringan area of 66,344.10 sq. kms. were granted.


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Hundred Exploration Licences are active covering an area of202,813.69 sq. kms on 30-06-2006. Around 11,824.45 sq.kms. area of three Exploration Licences remained under ForceMajeure, while an area of 14,121.42 sq. kms. of threeExploration Licences was surrendered/relinquished bydifferent operators. Twenty three E & P companies areoperating in upstream Petroleum sector of Pakistan.

In Sindh Province 65,774.83 Sq. Kms, Punjab 41,480.52 Sq.Kms, Balochistan 61,814.22 Sq. Kms , NWFP 11,395.66 Sq.kms and Indus Offshore 22,348.43 Sq. Kms areas were underexploration.

b. Mining/Development & Production Leases

Four (4)Development and Production Leases weregranted during 2005-06. Three applications for grant of D &Pleases over Naimat Basal, Kausar Deep and Siraj South ofOPII were pending at the end of fiscal year. A total of onehundred & twenty leases covering an area of 11,576.40 sq.kms. were valid at the end of the year.

In Sindh Province 8,317 Sq. Kms, Punjab 1,997.83 Sq. Kms,Balochistan 1,176.57 Sq. Kms and NWFP 85 Sq. kms arearemained under Mining/D &P Leases.


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Table-1

Exploration licences Granted during 2005-06

S.No. Block Location Operator Grant date Area(sq. kms)

1 3371-11 (Dhok Sultan) Punjab/NWFP OGDCL 06-07-2005 703.23

2 2565-1 (Samandar) Balochistan OGDCL 06-07-2005 2,495.33

3 3271-2 (Dhermund) Punjab Saif Energy 15-07-2005 2,412.23

4 2467-8 (Thatta) Sindh OGDCL 20-09-2005 2,438.85

5 2870-2 (Bagh-o-Bahar) Punjab OGDCL 20-09-2005 2,499.13

6 3370-12 (Latambar) NWFP OGDCL 24-10-2005 331.47

7 2870-3 (Khiranwala) Punjab OGDCL 24-10-2005 2,497.35

8 3072-3 (Bagh South) Punjab OGDCL 24-10-2005 2,497.05

9 2467-10 (Thatta East) Sindh OGDCL 24-10-2005 2,459.39

10 2870-4 (Pakhiwala) Punjab OGDCL 24-10-2005

2,495.29

11 2467-9 (Sari South) Sindh Saif Energy 25-10-2005 535.33

12 2365-1 (Offshore Indus-E)* Offshore GHPL/Shell 23-12-2005 7,389.95

13 2969-8 (Barkhan) Balochistan PPL 29-12-2005 2,104.69

14 2468-5 (Badin-IV South) Sindh PEL 05-01-2006 1,265.33

15 2468-6 (Badin-IV North) Sindh PEL 05-01-2006 1,246.03

16 2770-3 (Islamgarh) PunjabTechnoPetroleum 26-01-2006

2,229.51

17 2769-15( Thal) Sindh OGDCL 13-02-2006 1,622.67

18 2567-11 (Thano Beg) Sindh OGDCL 13-02-2006 2,404.73

19 2769-14 (Tegani) Sindh OGDCL 13-02-2006 270.60

20 2470-3 (Mithi) Sindh Eni Pakistan 27-02-2006 2,488.59

21 2470-2 (Rajar) Sindh Eni Pakistan 27-02-2006 2,450.64

22 2569-2 (Thar) Sindh Eni Pakistan 27-02-2006 2,473.47

23 2469-8 (Umarkot) Sindh Eni Pakistan 27-02-2006 2,499.77

24 2567-10 (Daphro) Sindh Petronas 06-03-2006 1,838.09

25 2768-9 (Sukkur) Sindh PEL 20-04-2006 2,435.40

26 3371-8 (Soghri) Punjab/NWFP OGDCL 31-05-2006 588.09

27 3272-13 (Chakral) Punjab OGDCL 31-05-2006 302.32

28 3270-6 (Wali) NWFP OGDCL 31-05-2006 2,179.26

29 3271-3 (Mianwali) Punjab/NWFP OGDCL 31-05-2006 2,280.91

30 2567-7 (Kirthar South) Sindh/Balochistan POL 15-06-2006 2,150.06

31 2467-11 (Sujawal) Sindh MGCL 21-06-2006 1,390.02

32 3067-3 (Harnai) Balochistan MGCL 21-06-2006 2,482.67

33 3066-4 (Hanna) Balochistan MGCL 21-06-2006 886.65

Grand total 66,344.10


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Table-2

Development & Production Leases Granted during 2005-06

S.No. Block Province Operator Grant date Area

(sq. kms)

1 Fateh Shah Sindh BP 26-07-2005 26.40

2 Noorai Jagir Sindh OGDCL 16-08-2005 2.43

3 Kandra Sindh PEL 05-01-2006 286.08

4 Rodho Punjab Dewan Petroleum 23-01-2006 34.63

Grand total 349.54

ii. Seismic Activities

Seismic activities conducting during 2005-06 were as following;

1. 2D seismic acquisition (onshore) 6,567 L.kms2. 3D seismic acquisition (onshore) 1,812 Sq.Kms3. No. of Service companies 054. No. of active crews 125. Types of acquisitions Dynamite, Vibroseis

Company wise seismic acquisition details are as under;Table - 2.3

Eni MOL NativusOMV

OGDCL

Paige SaifMGC

LPOL PPL

Hycarbex

Tullow

TOTAL

2D(L.Kms)

336 93 302 4,745 32 204 168 258 118 311 6567

3D

(Sq.Kms) 235 695 536 245 101

1812

iii. Drilling Activities

In 2005-06 one hundred and one wells were planned includingfifty three as exploratory and forty eight as appraisal/developmentwells. Against the target of one hundred and one, total sixty four wellswere spuded i.e. thirty three exploratory and thirty one asappraisal/development wells. In the Public Sector, OGDCL spudedtwenty three exploratory and seven appraisal/development wells, and inPrivate Sector thirty four wells were drilled which included tenexploratory and twenty four appraisal/ development wells. On an

average 220 meters were drilled per day.


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iv. Discoveries

During fiscal year 2005-06 there were eight oil and gasdiscoveries in the country namely Tando Allah Yar North-1, KunarDeep-1, Ziarat-1, Dars Deep-1, Bukhari Deep-1, Nim-1, Bahu-1 andChanda-2.

v. Production Activities

In 2005-2006 average oil production in the country remained65,577 BOPD and gas production was 3,836 MMCFD

OGDCL was the highest oil producing company with a production of11.501 million barrels at an average rate of 31,511 BOPD which was48% of the yearly oil production of the country, followed by POLproducing 4.773 million barrels at an average of 13,078 BOPD which is

20% of the total oil production. BP produced 4.626 million barrels,PPL 1.305 million barrels, BHP 0.656 million barrels, OPII 0.579million barrels, Eni Pakistan 0.116 million barrels, MOL 0.305 millionbarrels, Petronas 0.038 million barrels and OMV 0.035 million barrels.

OGDCL produced 309.103 BCF of gas, at an average rate of 847MMCFD, this constitute around 22.1% of the total yearly gasproduction of the country. PPL was the second highest gas producingcompany with 307.303 BCF at an average of 842 MMCFD, which isaround 21.9% of the total gas production. Mari Gas produced 171.045BCF, OMV 199.856 BCF, Eni Pakistan 134.510 BCF, BHP 99.348BCF, BP 87.8 BCF, OPII 31.414 BCF, POL 20.509 BCF, MOL 17.315BCF, Petronas 11.286 BCF ,PEL 8.884 BCF and Tullow 1.655 BCF.

During the fiscal year 2005-06 the LPG production was 1,495 metrictones per day. In companies JJVL was the major LPG producer with anaverage of 441 metric tons per day, and in refineries PARCO produced405 metric tons per day LPG.

The total remaining recoverable oil reserves at the end of the fiscal year2005-06 has been estimated as 324.47 million US barrels and theremaining gas reserves (including non-pipeline quality gas) as 32.58Trillion Cubic Feet.

2.3.2 DIRECTORATE GENERAL OF OIL

i. Achievement

Marketing

In order to create healthy competition, achieve efficiencies and attractinvestment in the downstream oil sector in pursuance of deregulationdrive of the Government and under the Criteria for establishment of


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new oil marketing companies in the country as approved by the E.C.Cof the Cabinet, two new oil marketing companies were approved in thename of Askar Oil Services Private Limited and Baqri pvt. Ltd. Inaccordance with the requirements of the Criteria, these companies willhave to make minimum investment of Rs. 500 million in the next threeyears of their operations.

A target of Rs. 6.4 million tons valuing at US $ 2.1 billion for theimport of diesel oil and furnace oil during 2005-06 was set. Actualimport of these products during the year remained at 6.0 million tonsvaluing at US $ 2.8 billion. Similarly, a target of 65 million barrelsvaluing at US $ 2.9 billion for the import of crude oil during 2005-06was set. Actual import of crude oil during the year remained at 63.5million barrels valuing at US $ 3.7 billion.

It was estimated that around 16 million tons of petroleum products will

be consumed during the year while actual consumption remained ataround 15.9 million tons almost near to the target.

Refining

Transfer of regulatory functions to OGRA

In pursuance of the reforms policy of the Government to segregatepolicy functions from regulatory functions, a study was conductedthrough CIDA consultant for onwards transfer of regulatory functionsto Oil and Gas Regulatory Authority (OGRA). In view of the finding,of the study, oil regulatory functions have been transferred to OGRAwith effect from 1st April, 2006

Establishment Of New Oil Refinery Project

Under the deregulation, privatization and liberalization policy of theGovernment, private sector investment in the down stream oil sector isbeing encouraged. The Government has therefore, approved additionalincentives for setting up of a new gross root deep convergent CoastalOil Refinery at Khalifa Point near Hub, Baluchistan.

Blending Of Ethanol Into Motor Gasoline

On the directive of Honorable Prime Minister, PSO has launched pilotproject w.e.f. 16th August, 2006 in Islamabad with 10% blending of

Ethanol into the Motor Gasoline, followed by similar project in Karachiand Lahore.


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REFINING CAPACITIES OF EXISTING REFINERIESAS ON 1-7-2006

S.No. NAME OFREFINERY

MillionM.Tons/annum

Barrels perday

1 Pak Arab refineryLimited

4.50 100,000

2 National RefineryLimited

2.71 62,050

3 Pakistan RefineryLimited

2.1 47,110

4 Attock RefineryLimited

1.82 40,000

5 Bosicor Refinery

Limited

1.50 30,000

6 Enar PetrotechServices Limited

0.13 3000

7 Dhodak RefineryLimited

0.12 2,500

Total:- 12.88 284,660

Pricing

The prices of petroleum products have increased tremendously in theInternational market during the past two years. The domestic sale pricesof petroleum products, being linked with International Market productprices, were required to be increased accordingly. The Government

decided to protect the consumers from the burden of high Internationalprices and capped the domestic sale prices from time to time sinceMay, 2004 till to date.

Government absorbed in loss on account of her revenue resources tothe tune of around Rs.74.5 billion by June 2006. In other words, theconsumer had been benefited through this capping in particular andGovernment had been able to control the inflation in the country.

As against the increase in International Market in the range of 81% to120%, the domestic sale prices have been increased in the range of 47%to 59% during the period May, 2004 to June, 2006.


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Refinery Wise imports of Crude oil during 2005-06

Name of Quantity Value US$Name ofRefinery Crude M.Tons Bbls FOB C&F

NationalRefinery

LtdArab Light

2,393,069 17,556,782 1,022,884,597 1,042,431,558

IranianLight 325,844 2,397,007 141,743,728 145,143,431

IranianHeavy 65,048 467,704 22,944,155 23,486,389

Murban 519,682 3,962,823 240,513,510 244,863,112

PakistanRefinery

Ltd

Sub Total910,574 6,827,534 405,201,393 413,492,932

BosicarPakistan

Ltd

QaterMarine 696,348 5,107,439 299,691,922 304,371,832

Arab Light2,330,393 17,104,227 1,006,191,881 1,025,181,939

Murban771,617 5,882,568 363,412,821 369,573,769

UpperZukam 1,498,569 11,067,574 635,571,578 647,755,826

Pak ArabRefinery

Ltd

Sub Total 4,600,579 34,054,369 2,005,176,280 2,042,511,534

Grand Total8,600,570 63,546,124 3,732,954,192 3,802,807,856

2.3.3 DIRECTORATE GENERAL OF GAS

The primary commercial energy supplies increased by 9.2% to 55.5 milliontones of oil equivalent. Natural gas contributed around 50.4% of the total primarycommercial energy supplies in the country. The present gas consumption in the country is3352 MMCFD. Comparison of sectoral gas consumption during 2004-05 and 2005-06 isgiven below :-


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i. SECTORAL GAS CONSUMPTION.

Unit: MMCFT.

Sectors 2004-2005

%age 2005-2006 %age

Power 507363 43.7 491766 40.2

Fertilizer 190412 16.4 198049 16.2G. Industries 226139 19.5 278973 22.8Cement 13383 1.2 15335 1.2

CNG/Transport. 24416 2.1 38885 3.2Commercial 27191 2.3 29268 2.4

Domestic 172103 14.8 171109 14.0Total 1161007 100.0 1223385 100.0

Average per Day 3181 3352

ii. Company-wise & Sector-wise new gas connections given are asunder:-

New connections provided during 2004-05 and 2005-06 .

SNGPL

Sectors 2004-05 Target for 2005-06 Achievement in 2005-06

Industrial 422 350 531

Commercial 3474 3845 4013

Domestic 174306 198740 206586

Total 178202 202935 211130

SSGCL

Sectors 2004-05 Target for 2005-06 Achievement in 2005-06

Industrial 224 230 267

Commercial 1489 1066 1661

Domestic 76865 71400 79041

Total 78578 72696 80969


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iii. Company-wise Transmission and Distribution Pipelines Networkduring 2004-05 and 2005-06 :,

SNGPL(FIGURES IN Km.)

Pipeline Network 2004-05 Target for 2005-06 Achievement in2005-06

Transmission Network 345 196 209

Distribution Mains 3157 2950 3647

Services 750 795 832

Total 4252 3941 4688

SSGCL

Pipeline Network 2004-05 Target for 2005-06 Achievement in2005-06

TransmissionNetwork

157 52 137

Distribution Mains 1158 1495 1475

Services 251 238 276

Total 1566 1785 1888

iv. (a) Targets Set For New connections for 2006-2007.

Sectors SNGPL SSGCL

Industrial 495 355

Commercial 4320 1680

Domestic 213000 87000

Total 217815 89035

b) Targets Set For Transmission/Distribution Network for2006-2007.

(FIGURES IN Km.)

Pipelines SNGPL SSGCLTransmission Lines 225 300

Distribution Lines 3700 2000

Total 3925 2300

v. Natural Gas Allocation and Management Policy, 2006.

a. The Federal Government will continue to make efforts to increasegas supplies from indigenous sources.

b. Gas supply to consumers in Commercial Sector will beencouraged.


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c. Gas allocation for the Fertilizer Sector will be made by the FederalGovernment keeping in view the domestic needs and gas supplyposition.

d. Gas supply to all consumers in Captive Power will be made afterfirst meeting the requirements of Domestic, Fertilizer, Commercialand Power (both WAPDA/KESC and IPPs) Sectors on thefollowing basis:i. Those dual fired power plants with a capacity of up to 50

MW, which employ combined cycle or cogenerationtechnology, shall be encouraged for allocation of gas. Inorder to ensure the optimal gas use for power generation,industrial units collectively setting up merchant powerplants for self-consumption only will also be included inthis category.

ii. Gas supply for self-power generation would be on as andwhen available basis at different locations.

iii. The pipeline extension, if required, would be at the cost ofthe sponsor of the industrial unit.

iv. Supply of gas to Service Industry for Captive Powergeneration will be subject to following:a. The sponsor makes an investment of over Rs. 500

million; andb. The gas load does not exceed 1 MMCFD.

e. Cement Sector will receive gas supply on as and when availablebasis.

f. Gas supply to any special project of strategic nature will be givenpriority.

g. Gas supply from Independent network will be made to FertilizerSector and Power sector as allocated by the Government or any

special project of strategic nature with the approval of the FederalGovernment.

h. For supply of gas to those economically backward areas, which donot meet cost of criteria determined by the Federal Government forsupply of gas, the Federal and or Provincial Government (s) willmake available the resources to the extent of the amount over andabove criteria limit.

i. All Khushhal Pakistan Schemes and other schemes of similarnature for upliftment of underdeveloped areas will be exemptedform PC-I requirement as per existing arrangement.

vi. LNG Policy - 2006

Augmenting import of gas supply through LNG import is an importantelement of Government s energy security strategy to encourage LNG import throughactive participation of private sector. The Government has announced first-ever LNGpolicy during 2005-06.


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Salient Features

a) An LNG Developer or LNG Buyer as the case may be, will beallowed to import LNG in accordance with applicable import laws,rules and regulations. While issuing license to an LNG Developer orRLNG buyer, the Oil and Gas Regulatory Authority (OGRA) willtake into account Government policy guidelines.

b) Zero present custom duty will be charged on imported LNG. LNGBuyer or LNG Developer importing LNG will also be exemptedfrom withholding tax at import stage in respect of such import. CBRwill issue necessary notification in this regard.

c) Exemption from custom duty in excess of 5% with total exemptionfrom sales tax in respect of plant, equipment and machinery, notlocally manufactured, imported by LNG Developer or LNG TO/O, asthe case may be, by expanding the scope of SRO 678(1)/2004, dated07.08.2004. Import of such plant, machinery and equipment and

parts will also be exempted from withholding tax at import stage asallowed under clause 56(ii) of part (vi) of the second schedule to theIncome Tax Ordinance, 2001.

d) Initial Allowance will be admissible at the rate of 50% of the cost ofdepreciable assets under section 23 of the Income Tax Ordinance,2001. In addition, normal depreciation at the rate of 10% will also beallowed for plant and machinery.

e) Exemption from withholding tax on interest payments to foreignlenders will be allowed as permissible under various provisions ofthe Income Tax Ordinance,2001.

f) Sales Tax @ 15% and Federal excise duty @ Rs. 17.18 per hundredcubic meters will be charged on import and supply of LNG.

vii. CNG for Automotive Use.

Government of Pakistan is encouraging use of Compressed Natural Gas(CNG) as an alternate fuel for automotives in order to control environment degradation,save foreign exchange in import of liquid fuels and generate employment. Due toGovernment s encouragement, Pakistan has become third largest CNG user in the world.To ensure rapid development of the CNG industry and considering the proposals of thisMinistry CBR exempted import duty and sales tax on import of CNG Euro-2 busesweather in CBU or CKD under SRO 576 (1)/2005 dated 06-06-2005 and Sales Tax Actexemption section 13(1) (schedule-6). Total CNG stations and vehicles converted toCNG upto end of financial years 2003-04 and 2004-05 are given as under:

S.

No

CNG Activity By the end

of 2004-05

By the end

of 2005-06.

%

Increase/Decrease

1. Total operational CNG station tillend of financial year (F.Y.) 732 1003 37.0

2. Vehicles converted to CNG 750,000 970,000 29.3

3. Total No of provisional licensesissued till end of financial year 2100 3997 90.3


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viii. CNG in Public Transport:-

The following proposals have been approved by the Federal Cabinet:-

i) Provincial government should gradually face out diesel engineintercity urban public transport (which would include buses,mini buses and wagons) in Karachi, Hyderabad, Lahore,Fisalabad, Peshawar, Quetta and Islamabad/Rawalpindi byend 2007. To achieve this target the provincial governmentmay also:

a) encourage conversion of present diesel buses to CNGif economically feasible for the buss operators:

b) set up and monitor the time bound goals forconverting diesel buses to CNG.

ii) All new busses/Mini buses/wagons to be inducted in theabove-mentioned cities should be dedicated CNG vehicles andor Petrol-CNG duel-fuel with immediate effect.

iii) No. two- stroke rickshaws should be registered in the above-referred cities after June 2006.

iv) To promote induction of CNG busses/mini buses/wagonsduring the diesel face out period, i.e. upto December 2007 theprovincial government should provide incentive to CNGbusses/Mini buses/wagons including:a) Lucrative routes,b) Exemption from rout tax excise tax and registration

feesv) Setting up of large CNG refueling stations for busses/mini-

buses/wagons should be facilitate by the provincialgovernment. Gas utility companies should provide gas to suchstation. OGRA should issues licenses to such CNG stationwithin one month.

vi) The benefit of exemption from custom duty and sales tax onCNG equipment and busses which are currently available onlyupto 30-06-2006 may be extended for period of five years.Manufacturing of CNG equipment and buses in Pakistan maybe given priority through attractive incentive for localmanufacturer under phased plan.

vii) Local manufacturing of CNG equipment should beencouraged in the country and OGRA should expediteapproval of locally manufactured CNG equipment.

viii) In order to facilitate of introduction of CNG busses, theGovernment should incentive wise the scheme throughpicking up (fully partially) interest on bank loans taken byprospective buyer of dedicated-CNG busses/minibuses/wagons. Rs. 5 billion provided in the MTDF for Public-Private Partnership in public transport can be utilized for thispurpose.


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ix) State Bank of Pakistan may encourage the commercial bank toestablish lines of credit for procurement of CNG busses/minibuses/wagons and for establishing their manufacturing facilityin Pakistan.

x) CNG equipment manufacturer and their investor may bemotivated to explore the possibility of technology transferredto joint venture with the foreign manufacturer of CNGcompressor and CNG cylinders.

xi) The testing facility for CNG equipment according to therelevant standard quality standard should be fully developed atHydro Carbon Development Institute of Pakistan make it fullycapable of performing the testing functions.

ix. LIQUEFIED PETROLEUM GAS (LPG).

Liquefied Petroleum Gas (LPG) is a clean, environmentally friendly,

portable and economical domestic fuel. It is rapidly becoming fuel of choice inareas, where gas distribution network is not available. Currently out of 19.2million house holds in Pakistan, 4.08 million are connected with natural gasnetwork; approximately 1.8 million are using LPG, whereas the rest are relyingon conventional domestic fuels like coal, firewood, kerosene, dung cake etc.

The Government of Pakistan is making all out efforts to promote LPGas a domestic fuel to replace conventional fuels like Coal, Firewood, Kerosene,dung cake etc to ensure availability of clean fuel to all people especially thoseresiding in far-flung and remote areas with a view to arrest deforestation andimprove environment. By virtue of current Policy, the government intends to;

a. Ensure supply of LPG to consumers at competitive rates.b. Enhance availability of indigenous LPG in the country.c. Ensure supply of LPG in far-flung and remote areas.d. Attract more investment in the LPG sector.e. Ensure safety of public life and propertyf. Discourage and eliminate unauthorized activities in the LPG

business.g. Generate healthy competition and improve quality of consumer

service.

x. The Government deregulated LPG prices and allocation w.e.f. 15thSeptember 2000. All the producers of LPG are empowered to either market theirLPG themselves or dispose it of through the licensed marketing companies or tothe new parties. All marketing companies are free to develop their LPG market,as they wish, except for use in automotive. However in order to ensure LPGsupply in remote hilly areas, with a view to protect our precious forests each

company is obligated to market at least 7%, of its product in AJK, 7% inNorthern Areas, 6% in FATA, and 10% of LPG uplifted from Pak-ArabRefinery Company Limited (PARCO) to Baluchistan. The regulatory workregarding LPG has been transferred to Oil and Gas Regulatory Authority(OGRA) w.e.f. 15th March 2003.However the policy formulation function ofMPNR remains.


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xi. LPG in auto sector.

The Government in past discouraged use of LPG in vehicles to ensure itsavailability to the domestic sector. However, to bring this sector under the safetynet and to bring competition in alternate auto fuel, the Government hasannounced use of LPG in motor vehicles which is expected to be notifiedshortly.

xii. LPG Production and Distribution Policy 2006.

In order to further increase LPG supplies, streamline its distribution ataffordable prices, especially to LPG starved areas of the country and promotehealthy competition for growth of LPG market as well as to ensure minimumsafety standards across the LPG supply chain, the government has introducedLPG Production and Distribution Policy 2006.

xiii. The salient features of the policy are as under:a) Public sector E & P companies will out source all LPG production to

technically and financially sound private sector parties through atransparent and competitive process.

b) To ensure safety throughout the LPG supply chain, LPG storage tanks,cylinders, bowzers, and distribution outlets of the licensees will meetthe minimum safety standards as laid down in applicable Rules.

c) Decanting of LPG from cylinder to cylinder is prohibited and OGRAshall cancel licenses of the defaulting companies.

d) OGRA will prescribe codes and standards for conversion of vehicles toLPG and the establishment of LPG re-fuelling stations for the autosector by LPG marketing companies with an effective monitoringmechanism.

e) OGRA will publish a list of authorized manufacturers for all LPGequipment including LPG refilling stations, conversion kits, fuel tanks,cylinders, storage tanks, and bowzers.

f) To ensure that cartels are not formed for charging a high consumerprice of LPG, OGRA will determine the reasonableness of pricekeeping in view the import parity price of LPG, producer price andaudited accounts of LPG marketing companies for the last two years.

g) All LPG marketing companies receiving LPG from sources in Punjaband NWFP will be obligated to supply at least 7% of their local LPG inNorthern Areas, 7% in AJK and 6% in FATA. All LPG marketing

companies receiving LPG from sources in Sindh and Balochistan willbe obligated to supply at least 10% of their local LPG in Balochistanprovince.

h) Any party can import LPG after paying applicable government dues.However, no party shall export LPG without the prior written approvalof MPNR.


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The Region-wise consumption of LPG and Import of LPG is as under:

a) Region-wise Consumption of LPG. (UNIT: M. TONS.)Region. 2004-05 2005-06. % increase /

(Decrease)AJK. 26614 31627 18.8

Baluchistan 9835 17890 81.9

Federal Area 3900 4465 14.5

FATA 15595 18513 18.7

NWFP

44786 63829 42.5

Northern Area 44950 57308 27.5

Punjab 196171 286562 46.1

Sindh 74433 98225 32.0

TOTAL : 416,284 578419 38.9

b) LPG Imports. (UNIT : M. TONS)

SECTOR

Years : 2004-05 2005-06

LPG Imports. 40492 24779.2

2.4 CONTRIBUTION IN OCTOBER 8, 2005 EARTHQUAKE

Ministry of Petroleum and Natural Resources and Petroleum Sector Companieshave contributed more than one billion rupees both in kind of relief and rehabilitation ofearthquake effectees. An amount of Rupees 542 million has been deposited in thePresidents Earthquake Relief Fund 2005.

2.5 ACHIEVEMENTS OF PUBLIC SECTOR DEPARTMENTS /ORGANIZATIONS DURING FINANCIAL YEAR 2005-2006 ANDTARGETS FOR FINANCIAL YEAR 2006-2007

The achievements/targets may be seen in chapters 3,4 and 5.


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Chapter 3

ATTACHED DEPARTMENT

http://www.gsp.gov.pk/

GEOLOGICAL SURVEY OF PAKISTAN(GSP)


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geological maps of Hyderabad block, Sindh covering an area of 2500 sq. km has alsobeen completed.

3.6 BASIC AND APPLIED RESEARCH

Alteration study of Gold mineralization in Hushe and Runthuk areas ofDistrict Khaplu Toposheet No;s 52 A/7 and 52 A/12 respectively

Completed sample collection & sorting for alteration studies of goldmineralization in Hushe, Machulu and Ranthak areas of Khaplu (Toposheet Nos. 42 A/7,8 & 12). Chemical analysis of the samples is in progress.

3.7 HYDROGEOLOGICAL STUDIES

Hydrogeological investigations of Mastung area, Pishin Lora HydroGeological Basin, Balochistan.

A thorough study of the drainage system of the southern and northern parts ofPishin Lora Basin has been carried out. This study includes the drainage system of Kalat,Mangochar, Mastung and Quetta.

3.8 REGIONAL GEOPHYSICAL MAPPING PROJECTS

i. Detailed geophysical surveys over magnetic anomaly near Kasur,District Kasur, Punjab.

Field work has been completed. In total 18 sq. km. area has beencovered by 725 gravity and magnetic observation. Data processing completedand gravity and magnetic anomaly maps have been prepared. Interpretation,computer modeling and report writing are in progress.

ii. Detailed geophysical surveys over magnetic anomaly near KahnaTown, District Lahore Punjab

Data of previous geophysical surveys has been collected. Interpretation,computer modeling and report writing are in progress.

iii. Kiar Sachcha Area

Covered 1 Sq. Km area by 300 magnetic and 280 SP observations. Data

processing and maps completed. Interpretation and modeling completed.

iv. Garhi Habibullah Area

Covered 5 Sq. Km area by 276 SP, 280 gravity and 580 magneticobservations. Anomaly map prepared. Interpretation and modeling completed.


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v. Masina Kalan Area

Covered 1/2 Sq. Km area by 155 SP, and 180 magnetic observations.Data processing and anomaly maps completed. Computer modeling of magneticanomalies and interpretation completed.

vi. Magnetic and self potential surveys in Bajour Agency area formanganese deposits.

Covered 1 sq. km. area by 900 magnetic and 700 self potentialobservations. Data processing completed and anomaly maps prepared. Reportcompleted and submitted for review.

3.9 ECONOMIC GEOLOGY

i. Petrological studies of Eocene rocks of Meting area, Quadrangle 40C/4, Thatta District, Sindh, Pakistan

Carried out megascopic studies of 30 samples of dolomite /limestone.Report writing is in progress.

ii. Petrographic and geochemistry of basalts to determine the tectonicenvironment, Rani Kot, Dadu District, Sindh

Collected data on geochemistry of basalts and samples & studiedliterature. Analysis of samples in progress.

iii. Petrological studies of dolomite along stratigraphic sectionsmeasured at Matyaro & Kathwari, Thano Bula Khan, Sindh

Completed petrographic studies of 40 samples of dolomitizedlimestone. Report writing and other studies are in progress.

iv. Studies for the preparation of isopach maps and lateral extensionof Lakhra coalfield in further south, Dadu District, Sindh

Prepared isopach maps regarding ash, sulphur, coal seams thicknessand BTU based on available data. Third draft of map has been finalized.

v. Chakwal District Resources Map

Field studies have been completed. Scanning and digitization ofChakwal district map is in progress. Improved version of mineral map ofChakwal has been prepared.


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vi. Geology and Mineral Resource Map of Lahore District, Punjab.

Carried out geological mapping of Model Town and Raiwind areas.Collected water samples and marked petrol pumps and brick kilns of rural areas.Completed analysis of 55 water samples.

vii. Dolomite resources of Khewra, Jutana, Ara Basharat area DistrictJhelum.

Carried out field work and measured stratigraphic sections in JutanaBhaganwala area. Analysis of samples collected is in progress.

viii. Evaluation of poly metallic mineralization in Khan Kalan area,District Muzaffarabad, AJK

Sample collection, laboratory study and compilation of data wereundertaken. Report writing is in progress.

3.10 ENVIRONMENTAL & ENGINEERING GEOLOGICAL STUDIES

i. Geological studies and environmental concerns of the Shekhupuraarea, (toposheet No. 44 E/14)

Field work and collection of data of environmental concerns have beencompleted. Report writing is in progress.

ii. Environmental Geology, Mineral and Groundwater Investigationsof Sialkot-Daska area (Toposheet No. 43 L/7)

Geological mapping, ground water and environmental studies havebeen carried out and the compilation work is in progress.

iii. Engineering geological investigation from Mansehra to Naran,Environmental & Urban geological studies of Gilgit and surrounding,Landslide risk assessment map of Hattian Bala and preparation ofInventory of landslide in Muzaffarabad, Neelum, Jhelum, and Kagan /Kunhar valleys.

Engineering geological investigation from Mansehra to Naran have

been carried out. Compiled road log from Mansehra to Naran. Studied in detailsix landslide sites between Balakot to Naran.

Field work completed for Environmental & Urban geological studies ofGilgit and surrounding areas.


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Inventory of landslide in Muzaffarabad, Neelum, Jhelum, and Kagan /Kunhar valleys was prepared for the Potential hazards of Landslides and

mitigation measures of earthquake hit areas of October 8th Earthquake.

3.11 SEMINARS/SYMPOSIA/LECTURES/ WORKSHOPS

i. Intl Conference on Earthquake in Pakistan Its Implications &Hazard Mitigation

The Geological Survey of Pakistan, Ministry of Petroleum & NaturalResources successfully organized an International Conference at Islamabad onJanuary 18-19, 2006 on 8th October, 2005 Earthquake in Pakistan, ItsImplications & Hazard Mitigation. The purpose of this conference was to bringthe global community of geoscientists to discuss latest advancements ingeosciences, earthquake engineering, seismic risks, active tectonic zones of thecountry and methodologies for hazard mitigation. Conference examined thereliability of the existing seismic and building codes of Pakistan for designingearthquake resistant structures and buildings.

ii. Brief activities of Geological Survey of Pakistan associated with the8th October, 2005 Earthquake

The Geological Survey of Pakistan provided the following material forRevision/Updating of Building Code of Pakistan:

Geological Map of Pakistan.

Tectonic Map of Pakistan.

Seismo-tectonic Map of Pakistan. Seismic Hazard Zone Maps of Pakistan.

The following maps were prepared for assessment of earthquakes andrelated hazards in the earthquake hit areas:

Probabilistic Seismic Hazard Estimation for the Islamabad &Rawalpindi areas.

Preparation of Landslide Risk Assessment Map of Earthquake affectedareas.

Landslide Risk assessment Map of Hattian Bala Lanslide.

Potential Hazards of Landsliding and Mitigation Measures ofEarthquake hit areas.

International Conference on 8th October 2005 Earthquake in Pakistan,its implications & Hazard mitigation:

A presentation was given to the Honourable Prime Minister jointly byGSP & NESPAK regarding Building Code dated 31st January 2006


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iii. A seminar on Seismic Risk of Karachi area and its mitigation Somenew thoughts was arranged by GSP, Southern Zone at Karachi office.

3.12 DRILLING OPERATIONS

The Geological Survey of Pakistan undertakes drilling under variousprogrammes for energy (coal) and mineral exploration. During this period GSP undertookextensive drilling operations under its different development projects, which includedsinking of 18 bore holes for a cumulative depth of 3080 meters for coal and mineralexploration. A total of 13 bore holes were drilled in Khaskheli area Badin, Sindh, Hanguand Karak coal field, NWFP and Sore Range area Balochistan for exploration of coal.

The mineral exploration programme of the GSP included drilling of 5 boreholes for a cumulative depth of 921 meters in Nooriabad, Dadu district, Sindh, Haji Goth,Uthal, Lasbela district and Nok Kundi, Chagai district, Balochistan for exploration of

iron ore and massive sulphide copper mineralization.

3.13 PROGRAMME OF ACTIVITES AND TARGETS 2006-2007

The GSP will undertake mapping of about 20,000 sq. km. area in various partsof the country. Mineral exploration projects include investigations for copper-gold, iron& Lead-Zinc-Barite deposits in Balochistan and NWFP, studies for celestite, limestoneand mineralization in Nagar Parker in Sindh.

Coal exploration will be carried out in the Eastern Salt Range, D. G. Khan,Punjab in addition to four development projects for coal exploration.

Land slide and other geo hazard studies will be carried out in earth quake hitareas in Northern Areas and Azad Kashmir.

Geochemical exploration will be carried out various areas of Balochistan, Sindh,Punjab and NWFP. urban and hydrogeological studies will be carried out forLahore and Islamabad cities.

Research projects will also be undertaken in collaboration with Harvard,Howard and Michigan universities of U.S.A.

Eight development projects (including 4 in energy sector and 4 in mineralssector) will be executed.


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Chapter - 4

AUTONOMOUS BODY

http://www.hdip.com.pk

HYDROCARBON DEVELOPMENT

INSTITUTE OF PAKISTAN(HDIP)


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4.1 INTRODUCTION

Hydrocarbon Development Institute of Pakistan (HDIP) is an autonomous bodyunder the Ministry of Petroleum & Natural Resources. It carries out applied research andrenders advice to the Government on scientific and technical matters in the oil, gas andenergy sector including energy-environment, energy-planning and energy-policy issues.The HDIP also provides consultancy and laboratory services for the oil and gas industryin Pakistan in diverse fields of its expertise.

4.2 INSTITUTIONAL STRUCTURE

The HDIP was established in 1975 through a Resolution of the Government ofPakistan. HDIP has been re-established as an autonomous body through an Act ofParliament in January 2006. Board of Governors has been reconstituted by PrimeMinister. Its Board of Governors is chaired by the Minister for Petroleum & NaturalResources, while its Chief Executive is designated as Director General.

Board of Governers

1 Mr. Amanullah Khan JadoonChairman

Minister for Petroleum & Natural Resources

2 Mr. Ahmad WaqarSecretary

M/O Petroleum & Natural Resources

3 Mr. Hilal A.RazaDirector General/Chief Executive

Hydrocarbon Development Institute of Pakistan

4 Mr. M. Naeem MalikDirector General (PC)

Policy Wing, M/O Petroleum & Natural Resources

5 Mr. Jalal-ud-Din QureshiFinancial Advisor

M/O Petroleum & Natural Resources

6 Mr. Ghulam HaiderChief Fuels

Planning & Development Division, Islamabad

7 Dr. S. Mahmood RazaAdvisor (HRD)

Higher Education Commission

8 Dr. M. Qasim JanVice Chancellor

Quad-e-Azam University, Islamabad

9 Dr. Muhammad Asif KhanDirector

National Center of Excellence in GeologyUniversity of Peshawar

10 Prof. Ahmad Saeed KhanChairman

Department of Petroleum & Gas EngineeringUniversity of Engineering & Technology, Lahore


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4.3 ESTABLISHMENT

The Head Office of the Institute is at Islamabad while its main laboratories arelocated at Islamabad and Karachi. In addition, it maintains four Petroleum TestingCenters at Lahore, Peshawar, Quetta and Multan, four CNG Stations at Islamabad,Karachi, Lahore and Quetta and four Cylinder Testing Labs at Islamabad, Karachi,Lahore and Peshawar. The HDIP has 221 employees. Its annual budget for 2005-06 wasRs.96 million comprising Rs.45 million provided as grant by the Government and Rs.51million generated from HDIP's own resources that included CNG activities, analyticalservices and consultancy studies.

4.4 OIL & GAS EXPLORATION

During the year 2005-06, HDIP's Geological & Geochemical Labs located atIslamabad, performed pre-exploration studies of Oil and Gas Basins for assessingregional prospectivity. The HDIP established with Canadian assistance, the Pakistan

Petroleum Core House, a national repository of rock samples, cuttings and cores fromwells drilled in Pakistan for further studies to promote exploration in the country. Thisstate-of-the-art facility, inaugurated on 17.12.2003, now houses 390,600 approximatelysamples from 868 wells drilled all over the country for quick access, physicalexamination and scientific study.

4.5 SPECIAL ASSIGNMENT

HDIP carried out a feasibility study on blending of Ethanol in gasoline on PrimeMinisters directive .The study was submitted to Prime Minister who was pleased toapprove the establishment of pilot project to gain the knowledge of using 10% Ethanolblend in gasoline.

4.6 CNG DEVELOPMENT

A research Project of HDIP on using compressed natural gas (CNG) to replaceliquid petroleum has grown into a country-wide industry. As a result, 984 CNG refuelingstations were operational on 30.6.2006 (including 4 by HDIP), catering to the needs ofmore than one million CNG vehicles.

4.7 REGULATORY INSPECTIONS

The HDIP acted as the third party inspector, on behalf of the Oil & GasRegulatory Authority (OGRA), to ensure compliance with technical and safety standardsunder CNG Rules 1992. About 1533 inspections of CNG stations were made during theyear. A number of LPG installations were also inspected for their compliance withtechnical and safety standards under LPG Rules 2001 and reports have rendered toOGRA.

4.8 INFORMATION DISSEMINATION

The Institute played an important role in the development of domestic energysector by maintaining a national energy database and publishing the official national


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energy statistics: "Pakistan Energy Yearbook", which is the most sought after Pakistanipublication among national and international energy professionals, investors andfinancers. The HDIP also publishes a standard research journal carrying articles relatingto Pakistan in the fields of oil and gas exploration, production, processing, utilization,economics, policy and planning, named "Pakistan Journal of Hydrocarbon Research".

4.9 INTERNATIONAL COOPERATION

HDIP held the Central Secretariat of an international forum "South AsiaGeological Congress (GEOSAS)", that provided a platform for promoting cooperation inresearch and development in the geological sciences in the South Asia region covering 10countries, namely, Bangladesh, Bhutan, India, Iran, Maldives, Myanmar, Nepal, Pakistan,Sri Lanka and Turkey. HDIP also worked as the Secretariat of Pakistan NationalCommittee of the World Energy Council (WEC). Director General HDIP has beenelected Chairman World Energy Council South Asia Region for 2004-07. He has alsobeen elected as Chairman of the SAARC Working Group on Energy constituted on thedirective of the 12th SAARC Summit held at Islamabad in January 2004.

First SAARC Energy Ministers Meeting organized by Ministry of P&NR/HDIPwas held in Islamabad in October 2005. SAARC Energy Ministers recommended theestablishment of SAARC energy center, which was approved by 13th SAARC summitheld at Dhaka. The SAARC Energy Center is operational in HDIP Islamabad sinceMarch 2006.

MPNR/HDIP has organized the First Meeting of Pakistan-China Energy Forumwhich was attended by large number of Chinese energy corporations, financialinstitutions as well as their Pakistani counterparts. An MOU has been signed between thetwo countries for cooperation in energy sector. The Forum has identified about 30specific projects for partnership between Chinese and Pakistani public and privateenterprises. This will attract more Chinese investment in energy sector of Pakistan.

4.10 CONCLUSION

The HDIP thus worked as the scientific and technical arm of the Ministry ofPetroleum & Natural Resources in the oil, gas and energy sector while at the same timefacilitating private sector investment in the sector by providing professional guidance andadvice. Although a public sector outfit, it performed to high professional standards andearned 53% of its budget from its own services. HDIP has achieved the Goal and Targetsassigned to it for expansion of CNG industry in Pakistan.


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Chapter - 5

COMPANIES

http://www.ogdcl.com

5.1 OIL AND GAS DEVELOPMENTCOMPANY LIMITED

(OGDCL)


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5.1 HISTORICAL BACKGROUND:

OGDC was created in September 1961 under an Ordinance, in pursuance of anAgreement signed by GOP with USSR for financing equipments, and services of Sovietexperts for exploration of oil and gas in Pakistan. During Seventies, the Corporationintroduced Western technology for updating its equipment base, and undertook anaggressive work program in Exploration sector in Pakistan. This resulted in discovery ofa number of oil and gas fields in the Eighties, thus giving the Corporation a measure offinancial independence. Consequently, the Corporation was taken off from the nationalbudget in 1989 to operate as a self-financing entity. In 1997, as a step towardsrestructuring, it was incorporated as a public limited un-listed company managed by anindependent Board of Directors. The Company was provisionally listed and its sharesfloated in November 2003.

5.1.2 HISTORICAL PERFORMANCE:

Since inception to June 2006, OGDCL has drilled 221exploratory wells and 252

development wells.

Since its creation upto June 2006, OGDCL has produced about 166.84 millionbarrels of oil and about 4.31 trillion cubic feet of gas.

5.1.3 POSITION IN THE INDUSTRY:

i. Concession Portfolio:

The companys concession portfolio as on June 2006comprises over 75,905.45 sq. km, which constituteapproximately 37.4% of the total exploration area granted bythe Government to the petroleum sector in the country.

ii. Reserves:

The company holds 106.770 million barrels of oil and 10.386TCF of gas remaining recoverable reserves on 1st January2006. These constitute 37% and 32% respectively of the totaloil and gas reserves of the country.

iii. Production:

The average production of oil and gas for the period July 2005to June 2006 from OGDCL operated fields was 31,511 barrelsper day and 847 MMcfd respectively. OGDCLs averageshare of oil production from non-operated JVs was 8,559barrels of oil per day and gas 226MMcfd, which constitutes

61% and 28% each of the countrys total production of oil andgas.


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5.1.4 HUMAN RESOURCES:

OGDCL has developed a highly qualified pool of professionals who canundertake and supervise all phases of oil and gas exploration, starting from preliminarygeological surveys and culminating to the operation of oil and gas processing plants.OGDCL, by June 2006, had total manpower strength of 11,413 out of which 1,914 areofficers and 9,499 are staff members. Company can proudly claim of having the largestprofessional/technical human resource base in the country.

BOARD OF DIRECTORS

1.Mr. Arshad NasarChairman/MD & CEO

Board of Directors

2. Mr. Aslam KhaliqChairmanPakistan Tobbaco Company (PTC) Board

3.

Mr. M. Naeem MalikDirector General (Petroleum Concession)

Ministry of Petroleum and NaturalResources

4.

Mr Khalid RafiChairman

System Innovations (Pvt.) Ltd

5.Mr. Jalal-ud-Din QuereshiFinancial Advisor (P&NR)

6. Mr. Skindar Hayat JamaliEx-Federal Secretary

7.Mr. Azam Farooque

Director Cherat Cement Ltd.

8.Mr. Al- Sysed Abdul Qadir

Jamaluddin Al-GillaniMNA (NA-270, Awaran-cum-Lasballa)

9.Mr. Alman Aslam

Director, PPIB Board, Islamabad

10.Mr. Asad Umar

President ENGRO

11. Mr. Zahid Majeed


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5.1.5 MAJOR PROJECTS:

OGDCLs major ongoing projects are as follows: -

i. Dakhni Expansion Project:

Dakhni Gas Processing started operation in 1989-1990 with adesign capacity of 30 MMSCFD. Over the years thecomposition of H2S contents of raw gas has increasedconsiderably resulting processing limitation on the existingplant. The scope of work of Dakhni Expansion Project involvemodification alteration of existing facilities and installation ofadditional Sulphur Recovery Unit (SRU).Due to this changethe existing plant is currently processing 22 MMSCFD feetgas. Expected incremental Production on completion will beas under:

Sales Gas: 12 MMSCFD Oil: 700 bbls per day LPG: 12 M.tons per day Sulphur: 80 M.tons per

day

ii. Qadirpur Compression Project(Phase-IV):

In accordance with the consolidated revised development planfor Qadirpur gas field and reservoir Consultant PGSrecommendations well head gas compression is required to bein operation by year 2008. In order to maintain productionplateau of 650 MMscfd raw gas upto 2014 and maintain gassupply pressure upto 2017, the service of Engineering &Project Management Consultant has been hired to accomplishthis goal.

iii. Supply of gas to SNGPL

Since commissioning of Qadirpur Capacity EnhancementProject Phase-II and III, Qadirpur plant is supplying 500MMscfd per day processed gas to SNGPL.


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iv. Supply of raw gas for LPL

In addition to 500 MMscfd of processed gas being supplied toSNGPL, 50 MMScfd Raw Gas is being supplied to SNGPLfor Liberty Power Limited.

v. Qadirpur Capacity Enhancement Project

The project envisages to increase the capacity upto 100MMcfd.

vi. Chanda Project:

The Chanda Project located in District Kohat of NWFP, is ajoint venture with M/s Zaver Petroleum and Government

Holding (Pvt) Ltd. The field has been put on regularproduction since 17

thJuly, 2004 and is presently producing of

2586 barrels per day Oil and 8.5 MMcfd of Gas. It is expectedthat about 25-40 M.Tons Per day LPGshall be produced upon shifting/installation/commissioning ofFimkassar LPG plant at Chanda field.

vii. Dhodak Expansion Project:

The Dhodak Condensate Field is situated in the rugged terrainof DG Khan District of Punjab province about 200 Km North-West of Multan City. The field is under production since1994. The scope of work of the project includes enhancementof capacity of Gathering System, Transportation System

(Trunk line), processing plant and its allied facilities toaccommodate additional well fluids. The Compressionfacilities would be installed to cater the decline of reservoirpressure after 2010 at Dhodak Plant to increase the deliverypressure from 500 psig to 800 psig. The estimated cost of theproject is US$ 50 million. On completion of the project theproduction will increase as under:-

a. Gas: From 43 to 64 MMSCFDb. Condensate: From 2700 to 4000 BPDc. LPG: From 198 to 258 MTD

viii. Tando Allah Yar Complex Project:

The project is located at District Hyderabad, Sindh. The scopeof work includes development wells, installation of gatheringSystem, processing facilities and Sales Gas Line. Presently 7wells have been drilled. Upon completion the Project


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production will be 2500 BPD of oil, 28 MMcfd of gas and 85Tons per day of LPG. The estimated cost of the project worksout to US$ 54.1 million.

ix. Uch II Project:

The project is located at Dera Bugti Agency, DistrictNasirabad Balochistan. The scope of project includes drillingof 15 development wells, installation of allied production,surface facilities and gas processing plant for onward supplyof processed gas to Power Generation Unit. After carrying outdetail study of UCH gas field, it is envisaged that OGDCL isin a position to commit 200MMSCFD for 14 to 16 years to anew Power Generation project.

Upon completion of the project, the sale gas from Uch will beenhanced from 250 MMSCFD to 450 MMSCFD. The

estimated cost of the project is US$ 250 million.

i) Sinjhoro Development Project:

The project is located at District Sanghar, Sindh. Theestimated cost of project would be US$ 89 million. Uponcompletion of the project the production will be 2940 BPD ofoil, 25 MMscfd of gas and about 224 M. Tons per day ofLPG.

5.1.6 NEW PROJECTS:

OGDCL has envisaged following new projects for implementation:-

i. Sara West Development Project:

Sara West field located in District Khairpur, Sindh Provincewas discovered in 1996. So far one well has been drilled at thefield. It is a low BTU gas and can be used for powergeneration only. The field was previously operated by M/STullow Pakistan (Development) Ltd., an Irish Company

ii. Jhal Magsi Project:

Jhal Magsi field located in Dera Murad Jamali was discoveredin 2003.It is a Joint Venture between OGDCL, GovernmentHolding and POL. Two wells have been drilled at the fieldwith second being dry.


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5.1.7 PROGRESS TOWARDS PRIVATIZATION OF OGDCL

In April/May 1999, Privatization Board of Pakistan approved privatization ofOGDCL and appointment of Financial Advisor. Expressions of Interest (EOI)for Financial Advisory Services for OGDCL were invited by the PrivatizationCommission in June 1999. In November 2003, the GOP divested 5% of itsshares in the company. Being listed on the Stock Exchange, OGDCL looksforward to a new corporate culture that will demand an increased degree oftransparency, accountability and responsibility under the code of CorporateGovernance.

The company is listed on all three Stock Exchange in Pakistan with highestmarket capitalization. It has around 24% weightage on Karachi Stock Exchange.The companys share are now also traded on the future counter of Karachi StockExchange (Guarantee) Limited. The company pays regular dividends to its share

holders.

The company is now positioning itself for listing on the London StockExchange. Focal points have been designated and are working in closecoordination with Messrs. Citigroup who have been appointed as FinancialAdvisor and a consortium of companies who are handling the transaction.


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5.1.8 PHYSICAL ACHIEVEMENTS:

OGDCLs Physical achievements during 2005-6 in comparison to itsachievements in 2004-5 are given at Annex-1. Brief description is as follows:-

(a) Exploratory Wells

OGDCL had drilled 24 exploratory/appraisal wells upto June 2006, inthe previous year during the corresponding period 11exploratory/appraisal wells were drilled.

(b) Development Wells

OGDCL had drilled 06 development wells up to June 2006. In thecorresponding period last year, 07 development well were drilled.

(c) Seismic Survey

OGDCL had carried out 5,356 line Kms seismic survey during July,2005 to June, 2006 as against 2,655 line Kms during the correspondingperiod last year.

5.1.9 PRODUCTION:

(i) OilOGDCLs average oil production during the period July, 2005 to June2006 remained at 31,511barrels per day as against 31,280 barrels perday during the corresponding period last year.

(ii) GasOGDCLs average production of gas during July, 2005 to June 2006

works out to 847 MMscfd per day as against 856 MMscfd per dayduring the last year corresponding period.

(ii) LPGThe average LPG production during the current financial year uptoJune 2006 was 285 Metric Ton per day as compared to 241 MetricTons per day during the corresponding period last year.

(iii) SulphurAverage sulphur production during period under report was 59MetricTons per day. During the corresponding period in the previous financialyear, the sulphur production remained at an average of 56 Metric Tonsper day.

5.1.10 FINANCIAL PROGRESS:

The gross sales during the period under review an amount Rs. 96,755 millionas compared to Rs. 73,710 million during the corresponding period last


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financial year. The all-round financial performance of the company isconstantly improving not only due to increase in prices of petroleum productsbut also because of strict financial discipline and curtailment of wastefulexpenditure. Details are as under: -

FISCAL YEARS

2004-2005Upto June

2005

2005-2006upto June

2006

% AGECHANGE

Rs in million

Gross sale less Govt. levies 73,710.10 96,755.38 31

Profit before tax 49,020.2 65,911.33 34

Profit after tax 32,967.9 45,967.72 39

Total Assets 114,578.9 121,314.71 6

Royalty 8,109.6 10,872.44 34

Return on average capital employed 41% 52% 27

5.1.11 FUTURE OUTLOOK:

OGDCL has earmarked 41+9=50 exploratory and development wells (09 wells,in Balochistan subject to security clearance) for the year 2006-07. The drilling ofappraisal and development wells hinges upon the number of discoveries achieved afterdrilling exploratory wells. Production of 56,570 barrels oil per day (45,000 barrels fromOGDCLs own fields and 11,570 shares from JVs). 1,346 MMCFD of gas (1,093 MMcfd

from own fields and 253 MMcfd share from JVs).

OIL & GAS DISCOVERIES:

By the grace of Almighty Allah OGDCL has been successful in makingfive oil and gas discoveries in 2005-06, namely Kunnar Deep-1, Nim-1,Dars Deep-1, Bahu-1 and Chanda-2 during the current year.

5.1.12 OFFSHORE ACTIVITIES:

Block-wise activities in the Indus offshore blocks w.e.f 1st July 2005 to 30thJune, 2006 are given as per following details:-

i. Indus Delta-A (BLOCK # 2367-4):

The Production Sharing Agreement (PSA) was signed on 23rd October 2004.The area of the block is 2499.01 sq. kms with grid area 31.72 and minimumwork commitment in Phase-I is 215.32 work unit. With financial commitment of


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Us $ 2.153 million. On completion of evaluation process it is expected thatsuccessful bidder will be awarded contract by 15 th August, 2006 and will beasked to start 3 - D seismic data acquisition programme in November 2006.

ii. Off Shore Block -R (BLOCK # 2267-1):

The block was provisionally granted on 27th December 2005. The area of theblock is 1492.23 sq. kms and grid area is18.92 with minimum work commitmentin Phase-I is 113.52 work units. Collected the available data and studied rest ofdata in LMKR. Proposal for purchase of seismic data from LMKR has beenprepared and will be submitted after signing the Production Sharing Agreement(PSA).

iii. Off Shore Block-S (BLOCK # 2266-8):

The block was provisionally granted on 27th December 2005. The area of theblock is 2129.91 sq. kms and grid area is 26.06 with minimum work

commitment in Phase-I is 156.36 work units. Collected the available data andstudied rest of data in LMKR. Proposal for purchase of seismic data fromLMKR has been prepared and will be submitted after signing the Productionsharing Agreement (PSA).

iv. Eastern Off Shore Indus-A (BLOCK # 2366-6):

The block was provisionally granted on 10th September 2005. The area of theblock is 2500.00 sq. kms and grid area is 31.92 of minimum work commitmentin Phase-I is 271.52 work unit. The available data is under study to design thetype of seismic survey and an international press tender for acquisition ofseismic data has been prepared and will be submitted after signing theProduction Sharing Agreement (PSA).

v. Off Shore Indus-G (BLOCK # 2265-1):

Offshore IndusG was granted to Government Holding Public Limited (GHPL)wherein the following Contracting Companies with Participating interestindicated hereunder entered into Production Sharing Agreement on 3rd July,2003 as follows:-

Petronas Carigali (Pakistan) Limited 40%OMV (Pakistan ) Exploration 15%OGDCL 10%Mari Gas Company Ltd 05%

All the partners decided to surrender their participating interest in the block.However OGDCL through an Assignment agreement acquired the share of other

contracting Companies till the expiry of the 5 th Contract year. Presently OGDCLhas applied for 6 months extension of the block. Discussion / negotiation isunder way with M/s Petrobras of Brazil for form it into the block.


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vi. Indus Off Shore-E: (BLOCK # 2365-1)

Indus offshore Block E is operated by M/s Shell. As per production sharingagreement of Joint Venture Partners & their share

Energy Year Book 2005-06

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