OGDCL suffers Rs 27.8b loss during oil exploration

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The Oil and Gas Development Company Limited (OGDCL) has incurred a massive loss of Rs 27.8 billion as 79 of the 247 wells drilled during the last ten years were found dry and abandoned. According to the details submitted by the Ministry of Petroleum to the Senate, the number of oil and gas wells dried during the last 10 years ending June 2011 was 79 and the amount spent on these wells was over Rs 27.8 billion. The corporation spent Rs 3.9 billion in 2010-11 on dry wells, Rs 4.5 billion in 2009-10, Rs 4.3 billion in 2008-09, Rs 4.1 billion in 2007-08, Rs 4.2 billion in 2006-07, Rs 1.5 billion in 2005-06, Rs 1.3 in 2004-05, Rs 2.2 in 2003-04, Rs 1.2 in 2002-03 and Rs 391,648,425 in 2001-02.
The number of oil and gas wells dried during the said period was 79 and the amount spent on these wells was Rs 27.8 billion. “During the last 10 years ending June 2011, OGDCL has drilled 247 wells out of which 125 wells were exploratory and 122 wells were appraisal and development wells. Out of these 79 wells were dry and were abandoned,” says the document. The ministry of petroleum further informed the Upper House that the cost of well depended on the total depth of the well and expected geological complications encountered during drilling of well. “OGDCL drilled wells in various parts of the country ranging in depth from 1,000m to more than 5,000m. The cost of wells also varies from $7 million to $25 million, depending upon the depth of the well and geological and drilling complications encountered,” the ministry further informed the senate.
“Hydrocarbon exploration business is a high risk and high cost venture which involve different geological, geophysical and engineering disciplines to accomplish the exploration goals. The well-established international risk factor for hydrocarbon drilling is that, one exploratory well will be successful out of 10 wells i.e. 1:10. However, the success rate in Pakistan is around 1:3.8, while OGDCL success rate during the last five years is 1:2.5 which is outstanding,” the document says. The document says that the total amount allocated to Basin Study/Exploration Research Department for the last eight years is Rs 1,135 million.
It says that the Basin Study and Exploration Research also conducted Pakistan Basin Study Project which was undertaken on the directives of the Ministry of Petroleum & Natural Resources through M/s Fugro Robertson Ltd UK at a cost of £2.7 million. “The project report is now being promoted/marketed to E&P Companies operating in Pakistan. The report will provide an assessment of hydrocarbon potential of sedimentary basins of Pakistan and ranking of areas, on the basis of petroleum prospectivity, potential reserves and economic viability,” the documents reveal.