No drilling at Kohlu Block despite passing 30 years to award of exploration license

Despite passing 30 long years to the award of exploration license of Kohlu Block-28 to Tullow Pakistan, drilling at site could not take place allegedly owing to less attention of the Energy Ministry and Petroleum Division’s Directorate General Petroleum Concession (DGPC).

According to sources, Kohlu Block has estimated gas reserves of 16Trillion Cubic Feet (TCF) and this Block 28 was awarded to Tullow Pakistan Developments Limited in 1991. However, despite passing 30 years to the award of Block 28 to Tullow Pakistan, drilling could not take place at the site allegedly because the Ministry of Energy and DGPC did not pay due heed in this regard.

“Tullow Pakistan Developments Limited was even not given access to Kohlu Block and later this company quit its business after failing to initiate exploration,” said sources. They added that the Ministry of Energy and DGPC has so far not given due attention towards the Kohlu Block due to different reasons unknown.

As per details, total area of Block 28 is 5,856.60 square kilometers and this is Pakistan’s largest exploratory Block in terms of area. This Block 28 remained stranded for decades due to different reasons including unfavorable security situation, less attention of MoE and DGPC. However, Mari Petroleum Company Limited (MPCL) farmed-in in the Block in April 2018 and acquired operatorship in October 2018. And, so far MPCL has completed initial work to start drilling including seismic survey and it is likely that the MPCL will start drilling of first well during the next financial years, said sources.

Documents available with 92 News that due to the efforts of former managing director (MD) of Oil and Gas Development Company Limited (OGDCL) Zahid Mir, the operatorship of Block 28 was obtained in 2017 and MPCL obtained the operatorship of this Block in 2018. Partnership of MPCL is 95percent and OGDCL is 5% in Block 28 of Balochistan province.

The sources said that instead of providing security to Tullow Pakistan Developments Limited to start drilling activity at the site, MoE and DGPC had not given due interest in the exploration of Block 28. On finding not friendly cooperation to initiate drilling at Block 28, Tullow Pakistan Developments Limited decided to quit business and later the company sold its assets in 2013 to close business in the country, said sources.

As per initial estimation, expected initial gas in place (IGIP) is 5 Trillion Cubic Feet (TCF) and recoverable (70percent) is 3.5 TCF in accordance with Smaller Leas Trend while expected IGIP is 17 TCF, recoverable (70pc) is 11.9TCF and total potential IGIP is 22 TCF while recoverable 15.4 TCF on Bigger Leads. Similarly, potential commercial value of the gas reserves is US$ 110 billion (@ US$ 5 per MMBTU) while realistic value is US$ 77 billion (@ US$ 5/MMBTU). Anticipated total exclusive royalty of the Balochistan province @ 12.5% of the gross commercial value of the gas reserves is 9.625 billions.

It is also learnt from sources that the Kohlu Block gas reserves are sufficient for the next 100 years needs of Pakistan, based on the current demand of gas in the market. Despite sending a questionnaire and making repeated efforts to obtain the official stance, federal minister for energy Hammad Azhar, spokesman Energy Ministry and Secretary Petroleum, did not give their response on the sent questionnaire.

Related posts