The geological configuration of the world is somewhat capricious. The most populated regions of the world and those that consume the most hydrocarbons barely have any oil and gas reserves. On the contrary, large oil and gas formations are generally found in what is called in geography the “demographic void”, vast expanses of land with very low density of inhabitants, such as deserts, poles or zones of jungle. This generates significant costs during the extraction and transport of said hydrocarbons. However, the most populous nations are fighting against fate and rapidly seeking hydrocarbons within their territories in an attempt to reduce their energy dependence and the inefficiency of transporting crude oil from far away. A good example is Pakistan, which has been investing for years to find oil on 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, raising expectations and excitement in one of the most densely populated countries of the world and who lives in a constant economic context. and the energy crisis.
Pakistan has a population of more than 240 million inhabitants and a population density that exceeds 270 inhabitants per square kilometer, doubling the figure for China, for example. With this population, Pakistan barely produces crude oil. According to official data, its oil production is around 60,000 barrels per day, while it must import more than 700,000 barrels every day to satisfy domestic demand.
With a poor power grid and a weak energy system, Pakistan has experienced major energy crises in recent years due to the need for 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 percent in 2013, for example, according to the U.S. Energy Information Administration in a paper on Pakistan.
Additionally, Pakistan has been struggling with growing debt and stagnant inflation for some time and is heavily dependent on foreign aid, which is often volatile. The country’s public debt is at its highest level in 30 years, exceeding 90% of GDP, while inflation is stuck at a rate of 10%. Even if this debt may seem minimal compared to that of certain countries in Europe, the United States or Japan, the cost of maintaining it is much higher. Pakistan must pay more than 13% interest to place its 10-year bondsfor example, which means that the cost of interest service (financial charges) absorbs a significant part of the budget. Therefore, every oil discovery is vital for the country, even if it is only a few thousand barrels of additional production.
The third discovery in the same block
Last November, Pakistan Petroleum Limited (PPL), the leading oil and gas exploration company, made another significant hydrocarbon discovery in the Pateji X-1 well, located in Sujawal district of Sindh. The company, which is also the country’s largest natural gas supplier, sent the statement containing the information to the Pakistan Stock Exchange (PSX) on Friday, according to local media.
“This is further to our letter No. CS/PSX-0205 dated 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 press release from the Pakistani gas supplier and explorer.
“We are pleased to announce that following an internal evaluation of the acquired data, another exploratory zone/formation has been identified in the Upper Sand (C-Sand) and a gas/condensate discovery has been made in the upper sand reservoir (C-Sand). in Pateji X-1 well, Shah Bandar block,” the notice said.
PPL had already announced 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 an active stake of 63% with its partners Mari Petroleum Company Limited (MPCL), Sindh Energy Holding Company Limited (SEHCL) and Government Holdings (Private) Limited (GHPL), each holding shares in exploitation. of 32%, 2.5% and 2.5% respectively.
“After rigorous evaluation and internal deliberations of G&G [geológicas y geofísicas]the Pateji
Potential for additional discoveries
Although three discoveries have already been made in the region, the company has also informed its stakeholders that potential hydrocarbon 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 said this latest discovery would 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 local hydrocarbon production.
A few days ago, PPL, through its improvement measures, recorded a notable increase in hydrocarbon production from its wells spread across the country. According to the company’s latest financial results, PPL saw its profit after tax fall by almost 24% to 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 view it as a country in constant crisis. In 2023, the country experienced record inflation, a significant decline in foreign exchange reserves and an unprecedented level of external debt.
Political instability is also a constant, with frequent changes of government and tensions between different political factions. Additionally, security has been compromised by terrorist attacks and internal conflicts, such as the recent attack in Khyber Pashtun province that left dozens dead.
This a combination of factors has seriously affected the economy and the well-being of the populationgenerating a cycle of crisis which seems to be perpetuated over time. It is therefore reasonable to say that Pakistan has been in constant crisis for the past few decades.
