Sponsored by RCP - OGV Energy
International

Drilling of Kekra-1 well in deep sea: Oil and gas field to be developed with Rs41 bn investment

Drilling of Kekra-1 well in deep sea: Oil and gas field to be developed with Rs41 bn investment

 

The four exploration and production companies’ joint venture headed by Italian company ENI that has started spudding Kekra-1 well in Indus G Block in Pakistan’s deep sea, if meets the success, will carve out the plan to develop the field with huge investment of over Rs41 billion.

The spud drilling activities have been kicked off with $75-80 million by joint venture with 25 percent share each. The Italian company ENI is operator of the Kekra well-1. However, Exxon Mobile, OGDCL and Pakistan Petroleum Limited (PPL) are the sleeping partners of the Joint Venture, Director General Petroleum Concessions (DGPC) Qazi Saleem told The News.

The Indus G Block was first given to OGDCL on August 12, 2006 but later on it was transferred to ENI on April 25, 2007 under Petroleum Sharing Agreement. Now the ENI as operator of four companies’ joint venture has started E&P activities in Pakistan deep sea. In case of huge discovery, Pakistan’s share in oil and gas discovery can go up to 70 percent depending upon the slabs mentioned in the agreement. The country at present possesses original onshore recoverable gas resources of 57 trillion cubic feet (tcf) out of which 38tcf has been produced and 19.5 tcf is yet to discovered. The country has recoverable resources of oil that stands at 1.246 billion barrels but so far 0.899 billion barrels have been produced so far.

Irtiza Syed, CEO EXXON Mobil, on January 16, 2019 at his office briefed Minister for Petroleum and Natural Resources Ghulam Sarwar Khan about progress at Indus G Block. The EN- led JV has started spud in. It will give its first good news in March or April. Exxon Mobil has given the target depth of 5500 feet. In March, Exxon Mobil will send a specimen to Houston for examination. Similarly, ENI will send the specimen to Milan in March. From April to May, there will be a reasonable idea that this well contains oil or gas. The discovery is anticipated to yield gas flows which can be as big as Sui field, with estimated reserves of 3 to 8tcf, or 25-40 percent of Pakistan’s total gas reserves.

However, DGPC Qazi Saleem said that the preliminary investment of $75-80 million for drilling endeavour is usually considered in the world of oil and gas as the sunk investment assuming the well emerges as dried one. The drilling activity is always risky business which is why investment on drilling is named as sunk investment. And if drilling comes with positive results, then about $300 million investment will be made for development of Kekra-1 oil and gas field.

To a question, he said that Sapimen — a rig achrted by ENI — operator of G Block which is located 230 kilometres south west of Karachi port has started the drilling process in Kekra well-1.

The DGPC disclosed about 17 wells in Pakistan deep sea were drilled in the past, but all endeavours went in vain. Highlighting the background of the drilling activities done in the past in ultra-deep sea of Pakistan, he said that first offshore well was drilled in 1963 by the US company Sun Oil but the well was found dried. The same Sun Oil Company in 1964 spud two wells in Pakistan’s deep sea but both also went dried. Then after lapse of eight years, Winter Shall from Germany explored three wells in ultra-deep sea which later on got abandoned as nothing was discovered in the three wells. He further stated that Winter Shall drilled two wells in 1972 and third one in 1975. Unfortunately, no oil and gas was discovered.

He went on to say that in 1976, Marathon Oil Company from US endeavoured for drilling, but nothing was discovered. In 1978, Husky Company from Canada also spud the well, but no success was met. Then after seven years’ time, it was OGDCL that spud the well in 1985, but again no discovery was made. Likewise, in 1989, Occidental company endeavoured and explored the well but that too gone dried. In 1992, Canterbury from New Zealand and in 1999-2000 Ocean company from US spud two wells but both went dried. In 2004, TOTAL — a French company also explored one well but that was also abandoned. Pakistan Petroleum Limited tried in 2005 and Shell from Netherlands endeavoured in 2007 and Shark-1 went in 2010 for drilling in Pakistan’s deep sea but all went in vain. In toto, 17 serious attempts were made for wells drilling for oil and gas, but nothing was discovered.

He said in the past many E&P companies such as PETRONAS, British Petroleum and OMV have left the country on account of many issues. They left the country as they were unable to initiate the E&P activities in the wake of worst law and order situation in the country. And more importantly military operations were started against the militants owing to which there was no peace and tranquillity in the country required for the on shore exploration and production activities.

He also said that the said companies were the multinational ones and at that time recession in international level was at peak and moreover, the price of crude oil went down drastically from $170 to $40 per barrel per day. So exploration and production activities at world level scaled down and it has also adversely impacted the companies in Pakistan.

He said that petroleum policy is being upgraded for alluring maximum investment on onshore drilling for oil and gas activities. In addition, in Pakistan the oil and gas reserves are deposited in pockets and no massive discovery is there which is why international companies also left.

 

Source: www.thenews.com.pk

Published: 20-01-2019

Share:

Subscribe for the Latest News and Updates

Marketing Permissions

OGV Energy will use the information you provide on this form to be in touch with you and to provide updates and marketing through the following methods:

  • Email
  • Direct Mail
  • Customised Online Advertising

Read the latest issue of the OGV Energy magazine

More News

Latest Magazine Banner

WellPro Group Banner

WellPro Group Banner - OGV Energy

Cegal Banner

Leyton Banner

Leyton Banner

Advertise with OGV Energy Banner