KARACHI, Jun 8, 2007 (Dow Jones Newswires)
State-run Pakistan Petroleum Ltd. (PPL.KA), in a joint venture with Austrian oil and gas company OMV AG (OMV.VI), hopes to acquire oil assets in Africa, the Middle East and Central Asia, a senior company executive said Friday.
Pakistan Petroleum - leading energy-deficient Pakistan's drive to buy stakes in foreign fields - plans to invest $15 million over the next three years to explore for oil and gas in Yemen through the joint venture.
As Pakistan meets more than 80% of its energy requirements through imports, including about $3 billion worth of crude a year, the government has been encouraging domestic firms to increase exploration activities.
"With the companies like OMV and our other partners in Pakistan and alone as well, we plan to exploration international opportunities," Munsif Raza, Managing Director of Pakistan's second largest oil and gas exploration firm told Dow Jones Newswires in an interview.
"We are also looking for such ventures in a number of Middle Eastern and African countries, including Oman and Qatar," Raza said.
The firm, which operates the Sui gas field - Pakistan's largest - in the troubled southwestern Baluchistan province, accounts for 26% of Pakistan's gas production.
It also operates five smaller fields in Baluchistan and the southern province of Sindh Raza.
The company will spend up to $165 million a year on exploration in country's untapped offshore areas as it wants to expand the number of domestic blocks it operates to 30 in the next few years, from 26 now.
"We plan to drill at least 10 wells a year in the next 10 years and our strategy is to target offshore blocks," he added.
Pakistan Petroleum has stakes in four offshore blocks in the Indus Basin, off southern Pakistan. Raza said drilling in one of the blocks would start in July 2007.
"Drilling activities in the other three offshore blocks are expected to start next year as we have completed the seismic work," Raza said.
Considering the country's discovery rate of 30%, the firm expects to have new discoveries almost every year.
"This fiscal year (July 2007-June 2008) we'll add three new discoveries."
The government has set a target of drilling 100 exploratory wells each year, compared with an average of 60 a year previously.
Global oil majors have been cautious about investing in Pakistan as most offshore wells drilled in the country by foreign firms have turned out dry.
Total, Pakistan Petroleum and Premier Oil Pakistan made unsuccessful attempts in the past few years to find hydrocarbons in deep water off Karachi.
According to official estimates, Pakistan has 27 billion barrels of estimated oil reserves, of which only 3% have been explored. The country also has an estimated 280 trillion cubic feet of natural gas reserves, of which only 42% has been explored so far.
Copyright (c) 2007 Dow Jones & Company, Inc.
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