New petroleum policy would help bring positive changes in the energy sector, enabling the country to meet the growing demand of oil and gas by achieving autarky in this sector, renowned expert on energy, Dr Gulfaraz Ahmed said on Thursday.
"I think the new policy is quite on time and hope that this will bring positive change in meeting the growing energy demand in the country," he expressed these views during a panel interview to APP.
Dr Gulfaraz, who is also a former secretary petroleum and former Chairman OGDCL and Nepra, said that increasing wellhead price is encouraging for oil and gas exploration companies, which would attract the prospective local and foreign investors to capitalise on this incentive.
Pakistan, he said, has tremendous potential in oil and gas sector, adding increase of wellhead prices from $45 to $100 is a substantial incentive to allure investors in this field.
Besides, the petroleum sector expert said the government has eased the criteria for obtaining exploration licences by lifting the condition of pre qualification of having the required track record in their respective fields and further decreasing bank security.
Under this liberal and aggressive policy, "more companies will come to take benefit of these initiatives, which will definitely accelerate oil and gas exploration and production activities in the country," he added. Dr Gulfaraz commended the efforts of the government to involve the local business community for successful execution of oil and gas exploration activities in the respective areas.
The companies undertake social welfare projects in the drilling areas. He said the amount of social welfare obligation in the exploration phase has been raised by US $5000 in each zone from $25,000 to 30,000 per year. Commenting on the present challenges, he said there are three major fundamental factors of energy security.
Elaborating, he said first is that "what percentage of total exports is used to import energy and if more than 15 percent of the countrys total exports are used to import energy then your economy is exposed because when the international prices go high that affects the balance of payment." He said, second is "the efficiency of converting energy into GDP, if we use more energy to produce one unit GDP then your deficiency will affect the economy. While the third factor is per capita energy consumption which is directly linked with per capita GDP."
Dr Gulfaraz said in all three factors Pakistans performance is low as its percentage of energy imports are even above 30 percent of the total exports. He said 40 percent oil being imported in the country is used for power generation which is improper as there should be alternate sources for producing cheaper electricity.
"We should build indigenous production of gas instead of importing oil which is wastage of precious resources, optimal use in power generation should be natural gas," he observed. He said Pakistans energy-mix demands are met by 50 percent natural gas, 30 percent LPG, 8 percent oil, 12 percent hydro electricity and one percent nuclear.
Terming the natural gas as lifeline for the country, he underlined the need for exploiting the countrys existing oil and gas potential by accelerating exploration activities. He said, "Pakistan can achieve self-sufficiency by enhancing indigenous gas production in energy sector, which will also help to bring the country expertise and technology at par with the international standard."
Commenting on the governments target of drilling 90 to 100 new exploratory wells during the year 2009, he said it is an unrealistic approach with the present infrastructure and expertise. However, he expressed satisfaction over the performance of about 40 national and international oil companies operating in the country.
Despite the fact that the countrys gas demand has been increasing substantially during last 20 to 30 years and these companies provided the required commodity to bridge the gap between demand and supply. "Bridging the phenomenal increase in demand of gas is reflective of the successful exploration activities of the companies operating in the country," he added.
Dr Gulfaraz said success rate in oil and gas exploration is very high in Pakistan as compared to other discoveries at international level. This figure shows that after almost every three to four drilling there is a find, while at international level discovery comes after eight to ten attempts.
About off-shore exploration activities, he said there is dire need of a major discovery to convince the prospective investors regarding the un-tapped oil and gas potential in waters of the country. "Pakistan direly needs a major discovery in off-shore drilling to motivate and attract other companies in that field," he added. Dr Gulfaraz admitted that despite the attempts in off-shore drilling there was no sufficient find but he was confident about a major discovery soon.
He said presently about six oil companies are busy in off-shore exploration activities and a company - Petroleum Exploration (Pvt) Limited has recently conducted a 2-D seismic survey while 3-D seismic survey is underway. To a question about future of IPI and TAPI gas pipeline projects, he said the countrys existing gas reserves are depleting fast and work on these projects should be accelerated.
He said Iran has the capacity to supply gas under IPI and Pakistan is looking for importing gas to meet its energy demand, while Turkmenistan has the commodity in abundance so these projects should be completed within two to three years.
He said there are sufficient reserves of coal in the country to meet the requirement of 400 years and with the upgradation of coal both the financial and power crisis could be overcome in a more effective manner. He stressed the need for maximum exploitation of Thar coal reserves in power generation to save billions of rupees being spent on import of furnace oil.
"Thar coal should be made active at the earliest for power generation instead of using oil." Commenting on electricity shortfall, he said alternative sources in power generation should be adopted to overcome the problem and ensure cheaper production. He said there must be a comprehensive strategy for electricity conservation and for minimising transmission losses.