ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet is expected to allow a consortium of Pakistan’s state-owned companies to participate in the bidding round for an offshore block in Abu Dhabi.
Abu Dhabi National Oil Company (Adnoc) will undertake the bidding process for awarding the offshore block to oil and gas exploration companies by December 31 this year.
Pakistan’s state-owned oil and gas exploration firms including Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL) are set to establish their footprint in offshore drilling outside Pakistan by participating in the bidding round in Abu Dhabi.
PPL, OGDC, Mari Petroleum Company Limited (MPCL) and Govt Holding Private Limited (GHPL) have decided to form a consortium for the bidding.
Sources told The Express Tribune that the Petroleum Division would table a summary before the ECC to seek permission for participation by state-owned companies in the Abu Dhabi bidding round.
PPL will play the role of operator in case Pakistan wins the licence for the offshore block. According to officials, the block has several discovered oil fields and there are both development and exploration opportunities for Pakistani companies.
They estimated the exploration potential at around 500 million barrels of oil equivalent based on existing discoveries. Pakistani companies will make investment of millions of dollars and in case of success Adnoc can also become a partner with 60% interest.
In the consortium, PPL will have a share of 30%, MPCL 30%, OGDC 30% and GHPL 10%.
Industry officials consider it as a great opportunity as it will help Pakistan establish its footprint in a highly prolific hydrocarbon-producing region and capitalise on future opportunities more easily. The oil produced would bring foreign exchange to Pakistan, they added.
Adnoc has announced Abu Dhabi’s block licensing strategy on behalf of the Supreme Petroleum Council in a bid to hold second round of bidding for five new geographical oil and gas blocks for both conventional and unconventional resources.
Successful bidders will enter into agreements and they will be granted exploration rights. The bidders will try to achieve defined targets in the exploration phase to have the opportunity to develop and produce any discoveries.
The five new blocks open for bidding include three offshore and two onshore. They are offshore block 3, offshore block 4, offshore block 5, onshore block 5 and onshore block 2 spread over an area of approximately 34,000 km2.
The United Arab Emirates (UAE) is the world’s seventh largest oil producer with approximately 96% of its reserves within the emirate of Abu Dhabi. It is estimated that the UAE holds 97.8 billion barrels of oil – which is equal to 5.7% of the world’s oil reserves – and 215 trillion cubic feet of gas – equal to 3.3% of the world’s recoverable gas reserves.