Canadian oil and gas company, Niko Resources Limited (NRL), is said to have planned winding up its exploration operations on offshore wells in Pakistan after Director General (DG) Petroleum Concession (PC) refused to listen to their concern over pricing issue, Business Recorder has learnt reliably.
Sources revealed to the Business Recorder that Sher Khan, who is holding current charge of DG PC, failed in addressing the grievances of exploration companies on which some other companies were also planning to wind up their business in Pakistan. Sources further maintained that oil and gas exploration companies had also complained against Sher Khan to the former Petroleum Minister Syed Naveed Qamar.
When contacted, DG PC Sher Khan refused to comment on winding up operations of Niko, saying that just 'no comment'. DG PC Sher Khan had also faced contempt of court charge in Supreme Court over irresponsible statement and was relieved after submitting unconditional apology before court.
Niko is a Calgary Canada-based independent international oil and gas Company with operations in India, Bangladesh, Indonesia, Kurdistan, Trinidad, Madagascar and Pakistan. The Company is one of the fastest growing companies in the industry with a market capitalisation of over $5 billion trading on the Toronto Stock Exchange under the symbol NKO. Government of Pakistan had awarded four blocks in March 2008 to Niko for offshore drilling activities.
"Drilling of one well in onshore requires $10 million spending whereas one offshore well drilling needs $80 to 100 million," sources said adding that exploration companies dealing with offshore drilling wants some more incentive to make drilling activities economically viable.
They said that many exploration companies had drilled around 21 offshore wells since creation of Pakistan. "There have been small discoveries which have not been economically feasible due to higher spending on offshore wells," sources said, adding that exploration companies that had been awarded offshore blocks requested DG PC to consider giving some incentives for offshore drilling. But DG PC Sher Khan is not addressing the concerns pertaining to exploration of offshore wells.
"Oil and Gas Development Company Limited (OGDCL) had done offshore drilling in joint venture with French Company 10 years ago and the cost at that time stood at $45 million," sources maintained. British Petroleum (BP) and OGDCL were also awarded some blocks for offshore drilling but no activity had started due to higher cost on offshore drilling activities.