The geological configuration of the world is somewhat capricious. The most populated areas of the world and those with the highest consumption of hydrocarbons barely have oil and gas reserves. On the contrary, large oil and gas formations are usually found in what in geography is called ‘demographic void’, large areas of land with very low density of inhabitants, such as deserts, poles or jungle areas. . This generates significant costs when extracting and transporting said hydrocarbons. However, the most populated nations fight against destiny and are rapidly seeking hydrocarbons in their territories to try to reduce their energy dependence and the inefficiency of bringing crude oil from far away. A good example is Pakistan, which has been investing for years to find oil in its territory with relative success. This week it was confirmed that Pakistani oil and gas companies have made a third consecutive discovery of gas and oil in the same block, which is generating expectations and excitement in one of the most densely populated countries in the world and which lives in a constant economic and energy crisis.
Pakistan has a population of more than 240 million inhabitants and a population density that exceeds 270 inhabitants per square kilometer, doubling, for example, the figure for China. With this population, Pakistan barely produces crude oil. According to official data, its oil production is about 60,000 barrels per day, while it needs to import more than 700,000 barrels each day to satisfy domestic demand.
With a poor power grid and a weak energy system, Pakistan has suffered major energy crises in recent years as a result of the need to import large quantities of expensive fuelchronic shortages of natural gas and electricity, and the use of insufficient transmission and distribution systems. The Asian Development Bank showed how prolonged energy shortages reduced GDP by 2 to 3% in 2013, for example, according to the US Energy Information Agency in a document on Pakistan.
Furthermore, Pakistan has been struggling with mounting debt and stagnant inflation for quite some time and is heavily dependent on foreign aid, which is often volatile. The country’s public debt is at 30-year highs, exceeding 90% of GDP, while inflation is stuck at a rate of 10%. Although this debt may seem small compared to that of some countries in Europe, the US or Japan, the cost of maintaining it is much higher. Pakistan has to pay more than 13% interest to place its 10-year bondsfor example, which causes the cost of the interest service (financial costs) to eat up an important part of the budget. Therefore, each oil discovery is vital for the country, even if it is only a few thousand barrels of more oil production.
The third discovery in the same block
This November, Pakistan Petroleum Limited (PPL), the leading oil and gas exploration company, has made another significant hydrocarbon discovery in Pateji X-1 well, located in Sujawal district of Sindh. The firm, which is also the most important supplier of natural gas in the country, sent the statement with the information to the Pakistan Stock Exchange (PSX) this Friday, according to local media.
“This is a continuation of our letter No. CS/PSX-0205 of November 15, 2024 regarding the discovery of upper sand reservoir (D-Sand) in Pateji X-1 exploration well, located in Sujawal district, Sindh,” said the statement from the Pakistani gas supplier and explorer.
“We are pleased to report that following internal evaluation of the acquired data, another exploratory zone/formation was identified in the upper sand (C-Sand) and a gas/condensate discovery was made in the upper sand (C-Sand) reservoir. in Pateji X-1 well, Shah Bandar block,” the notice reads.
PPL had already reported about two weeks ago that the well was drilled, tested and discovered in the Shah Bandar block. The Shah Bandar block is operated by PPL with a working stake of 63% along with its partners Mari Petroleum Company Limited (MPCL), Sindh Energy Holding Company Limited (SEHCL) and Government Holdings (Private) Limited (GHPL), each with operating shares of 32%, 2.5% and 2.5%, respectively.
“After rigorous evaluation and internal G&G deliberations [geológicas y geofísicas]the Pateji
Potential for more discoveries
Although three discoveries have already been made in the area, the company has also informed its stakeholders that potential hydrocarbon-bearing zones have been identified based on drilling results and wireline logging data.
“During testing, the well returned 12.4 million standard cubic feet per day (mmscfd) of gas and 196 barrels per day of condensate against a wellhead flow pressure (WHFP) of 2,551 psig (pounds per square inch). gauge, which is a measure of pressure measured relative to ambient atmospheric pressure) in a 32/64” choke from the upper sands of Lower Goru (C-Sand),” he added.
PPL has commented that this latest discovery will increase hydrocarbon reserves and enable the energy sector to reduce the current energy crisis in Pakistan, thereby saving a significant amount of foreign exchange for the country through indigenous hydrocarbon production.
Days ago, PPL, through its improvement measures, recorded a notable increase in hydrocarbon production from its wells located throughout the country. According to the company’s latest financial results, PPL saw its profit after tax fall by almost 24% to record Rs 22.69 billion for the quarter ended September 30, 2024.
Pakistan has faced multiple economic, political, energy and security crises in recent years, leading some analysts to consider it a country in constant crisis. In 2023, the country experienced record inflation, a significant drop in foreign exchange reserves, and an unprecedented level of external debt.
Political instability has also been a constant, with frequent changes of government and tensions between different political factions. In addition, security has been compromised by terrorist attacks and internal conflicts, such as the recent attack in the Khyber Pashtun province that left dozens dead.
This combination of factors has seriously affected the economy and the well-being of the populationgenerating a cycle of crisis that seems to perpetuate itself over time. Therefore, it is reasonable to state that Pakistan has been in constant crisis for the past few decades.
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