Pakistan has received a rather poor response in the second round of awarding exploration blocks for onshore exploration rights to oil and gas production companies as it received bids for 15 out of a total of 20 blocks.
Sources told The Express Tribune that the Director General Petroleum Concession (DGPC) – a wing of the Petroleum Division – sought bids for 20 exploration blocks across the country in a bid to attract investment in the energy sector and boost exploration activities to enhance oil and gas production.
However, oil and gas exploration companies submitted bids for 15 exploration blocks whereas the DGPC received no bids for five exploration blocks.
Earlier, in its first round, during the present government of Pakistan Tehreek-e-Insaf (PTI), the Petroleum Division had sought bids for award of 10 exploration blocks to the exploration companies.
But the exploration and production companies did not give encouraging response.
Therefore, the Petroleum Division decided to initiate the second round of bids. Before offering the blocks, the Petroleum Division had chalked out a plan for more participation of foreign companies.
Under the plan, officials of the Petroleum Division attended roadshows and energy conferences in different countries including the UAE and Russia to encourage foreign companies to participate in the bidding.
But despite all efforts, Pakistan was unable to attract foreign companies. Companies currently working in Pakistan participated in the bidding.
As many as nine companies took part in the process. State-run oil and gas explorer Oil and Gas Development Company Limited (OGDCL) had a major presence in the entire bidding process as it participated in bidding for 13 exploration blocks. Other companies included Pakistan Petroleum Limited (PPL), Petroleum Exploration Limited (PEL), Pakistan Oilfields Limited (POL), Mari Petroleum, OPL, Zaver Petroleum, OGIL, Okta and Spud Eng.
According to a statement issued by the Petroleum Division, DGPC publicly opened bids for 20 onshore blocks for the grant of petroleum exploration rights on Friday at the Petroleum House, Islamabad.
The minimum investment to be made by the exploration and production (E&P) companies in these blocks will be over $71 million in three years.
Apart from E&P activities, the successful companies will also spend over $1.3 million in social welfare in areas of their respective blocks.
For blocks that have discoveries, several hundred million dollars will be invested by these companies in development work.
The auction of new oil and gas blocks is part of the government’s strategy to revive E&P activities in the country, which had been ignored earlier.
The current government also aims to reduce reliance on imports of oil and gas by introducing ease of doing business in the petroleum sector and transparency to ensure a level playing field for all competitors. The onset of E&P activities will help to create job opportunities and reduce import bill.