ISLAMABAD Mar 15, 2007 (Dow Jones Newswires)
Pakistan will soon offer 17 new offshore and onshore oil and gas exploration blocks, as well as introduce a new petroleum policy with more incentives, a government official said late Wednesday.
"A new Petroleum Policy of Pakistan will be unveiled soon, providing lucrative incentives for the protection of local and foreign investors in offshore and onshore oil and gas exploration", Petroleum and Natural Resources Minster Aman Ullah Jadoon said in a statement.
The 17 oil and gas blocks will be offered after the policy is introduced this year, Jadoon said without providing a specific timeframe.
Pakistan has a vast onshore and offshore sedimentary area spanning 827,000 square kilometers, of which around 25% is under exploration, Jadoon told officials of U.K.-based oil and gas consultancy Fugro Robertson and Austrian oil and gas company OMV (OMV.VI) separately.
The new policy is aimed at boosting oil and gas exploration activities in the country through the introduction of new incentives, Jadoon said.
Fugro Robertson and OMV have expressed interest in expanding their presence in Pakistan. Fugro Robertson is working with Pakistan's Oil & Gas Development Co. (OGDC.KA) until 2008, and is willing to extend the agreement, a petroleum ministry spokesperson said.
Fugro Robertson is advising OGDCL on bidding for the new oil and gas exploration blocks in Pakistan. OGDCL and OMV, among other companies, are considering participating in bidding for the blocks, the ministry spokesperson said.
Although bidding will only open after the policy is introduced, the ministry is testing the market's response for the new blocks.
"The company will help OGDCL participate in bidding for the new blocks, which were under consideration," Fugro Robertson Managing Director Richard Fowler said.
OMV has invested $450 million in a gas field in Sindh Province to produce 550 million cubic feet of gas daily, the company's Senior Vice President Wolfgang Stock told Jadoon, adding that OMV is keen to increase its investment in the South Asian country.
Pakistan has a high ratio of gas discoveries compared to the global average. Of the 572 exploration wells, 157 have been proven to be viable, with natural gas deposits totaling 43 trillion cubic feet. The global ratio is one gas discovery for every eight exploration wells.
Almost half of the 26 companies in Pakistan's oil and gas exploration sector are foreign companies.
Copyright (c) 2007 Dow Jones & Company, Inc.
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