Petroleum Industry in Pakistan

Article excerpt

I would like to take this opportunity to briefly touch upon one or two topics of interest to the Petroleum Industry in general that may be specifically applicable to Pakistan.

A subject of interest to us all is the country's increasing demand for energy and efforts to meet this demand. As we learn daily from the media, the country is in the midst of an energy crises: the demand exceeds the supply and we have daily load-shedding of electricity and sometimes restriction of gas supply. Petroleum meets over 75 per cent of the country's total requirements of commercial energy. In 1991-1992 the total, consumption of petroleum was about 24 MM TOE. Out of this about 12.1 was oil and 11.9 was gas. This demand is increasing at about 6 per cent per year. Although the gas is locally produced, nearly 70 per cent of the oil products are imported costing $1.5 billion per year. This is a fairly significant portion of Pakistan's total foreign exchange earnings. Financing the imports, the production of refined products, the storage and transportation are all areas that need urgent attention if we are going to meet the growing requirements of the country. The constraints facing the Petroleum Industry in Pakistan are at all levels:-

* At the exploration level, we are at a position that no significant discovery has been made since oil was discovered in 1981 in the Badin area and the Lower Indus Basin was proved to be an oil bearing area. In fact the number of exploratory wells drilled during the recent past has only been about 18 per year, which for a country like Pakistan with large sedimentary basins is quite low.

* At the production level there are a number of low quality gas fields which have been dormant for a very long time. For example UCH is still undeveloped.

* In the refining sector there has been a stagnancy in growth. The last new refinery was established in 1966 and there has been no significant increase in capacity of the three existing refineries since 1985. As a result out of the year's demand of about 12 MM tons nearly 8 M.M. tons is imported as products. This creates a very high dependance on imported products and leads to undue risks of availability in case of emergencies.

* The Port facilities for handling imported crude oil and products are presently over burdened with the result that Tankers have to wait at the Port and incur demurrage. …