The federal government has granted further two years extension to M/s ENI Pakistan Limited to retain area "B" of Badhra development and production lease, official sources told Business Recorder. ENI has been operating in Pakistan since 2000 and is one of the main IOCs (International Oil Companies) operating in the country in exploration and production of natural gas.
The company operates in Pakistan in the exploration and production of hydrocarbons and in the oilfield services, construction and engineering sector. Badhra development and production lease, covering an area of 230.26 square kilometres in district Dadu was granted to ENI Pakistan Limited (operator), OGDCL, Kirthar Pakistan B.V and PKP B.V, a joint venture on January 8,2004 for 23 years.
ENI was required to establish the extension of Mughalkot structure in area A and B of Badhra within a period of one year from the grant of lease, failing which area-B would stand relinquished automatically. ENI had so far availed 7 years extension to establish extension of Mughalkot formation of area A and in area-B but to no avail.
In July 2009 the government approved further extension of two years allowing retention of area "B" by ENI, subject to the following conditions: (i) ENI will confirm a well in area "B" up to Mughalkot and will have the right to explore in deeper formation of lower Goru and Chiltan; (ii) in case of discovery, separate lease will be granted for area "B"; (iii) OGDCL will be carried for the exploration/ appraisal work in area "B"; (iv) the reference crude price in area -B will be capped at $ 100/bbl; and (v) a final decision of area B has to be taken in the extended period of two years, failing which no further extension will be granted.
The sources said ENI was obligated to drill an exploration well in area B of Badhra D&P lease. However, ENI drilled the development well Badojabal in their approved leased area- A in March 2009. The company intends to retain the area-B for further two years to discharge its outstanding obligation of drilling a commitment well.
According to sources, ENI was the only company engaged in off-shore drilling and there was a need to encourage it. Besides, the company had already invested $ 40 million in Pakistan. ENI's exploration and production operations in Pakistan are regulated by concession contracts, for onshore operations, and Production Sharing Agreements (PSA), for offshore operations. In 2009, ENI produced 58,000 barrels of oil equivalent per day (mainly natural gas) in Pakistan.
The main permits where Eni is involved in operations are Bhit (40pc Eni), Sawan (23.68% ENI ) and Zamzama (17.75 pc ENI), which in 2009 produced approximately 88 pc of ENI 's total production in the country. Operations carried out during the year were aimed at optimising production, particularly in the Bhit, Sawan and Kadanwari fields, by drilling additional wells.