CAPITAL: Islamabad

MONETARY UNIT: Rupee

REFINING CAPACITY: 138,850 b/cd

OIL PRODUCTION: 55,400 b/d

OIL RESERVES: 208 million bbl

GAS RESERVES: 21.6 tcf

Pakistan planned to restructure its mostly state-run oil industry, reducing Pakistan State Oil Co.`s 76% share of the national products markets.

The Energy Ministry predicted that would reduce product prices.

A report by HSBC Securities Asia Ltd. said Pakistan`s marketing sector was likely to grow strongly if the government deregulated to attract foreign investment.

It said, "Demand for oil and petroleum products was expected to grow 6-8%/year during the next decade.

"Given expanding energy needs and limited domestic investment capacity for indigenous exploration, deregulated margins and returns were key for Pakistan to attract foreign direct investment in the oil sector."

Pakistan had three major marketers: PSO with 76%, Shell Pakistan Ltd. 19%, and Caltex 6%.

The report said Pakistan planned to privatize PSO after 2000 and added that competition in the sector would intensify as global oil majors entered the business.

In 1997 Pakistan unveiled a policy to encourage oil and gas exploration by giving companies tax holidays and other benefits.

GAS finds

OMV (Pakistan) Exploration GmbH had a 1 tcf gas discovery in Sindh province.

It said 1 Sawan was drilled to 3,587 m and penetrated a 95 m gas column in the Cretaceous lower Goru, with 75 m of net pay. It flowed at a stabilized rate of up to 58 MMcfd of gas through a 62/64-in. choke.

Southwest Miano license partners were operator OMV 25%; Pakistan Petroleum Ltd. (PPL) 30%; Hardy Exploration & Production Ltd., London, 30%; Czech firm Moravske Naftove Doly Doly AS (MND) 10%; and the Pakistan government 5%.

The operator said, "The Sawan-1 well has established substantial reserves, which would be quantified following further data analysis. The joint venture believes that the reserves potential of the field was in excess of 1 tcf of gas."

OMV discovered Miano gas field on Block 20 to the northeast in 1993 and was negotiating development through nearby gas processing facilities in Kadanwari field. There, London`s Lasmo plc was operator.

London`s Premier Oil plc, on behalf of the Bolan Joint Venture Partners (Premier, Sydney`s Novus Petroleum Ltd., and Pakistan`s Government Holdings), had a gas discovery in Pakistan`s Balochistan area.

The Zarghun South 1, drilled to 2,172 m, flowed at a stabilized rate of 16.7 MMcfd of gas through a 56/64-in. choke from the Jurassic, Paleocene, and Cretaceous. It was the first well drilled on the concession.

American Energy Group Ltd. found gas in a Middle Indus basin wildcat in central Pakistan.

Initial tests on the 1 Kharnhak gauged gas from two pay zones.

GAS lines

The discoveries were good news for Pakistan, especially since two major import projects collapsed.

Unocal Corp., the head of an international consortium, planned a $2 billion, 910 mile line from Dauletabad gas fields in southern Turkmenistan to Multan in central Pakistan`s Punjab province via Afghanistan.

It would have delivered 1 billion cu m/day beginning in 2001. Unocal said it deferred the project for political and economic reasons.

Also, because of tensions with India, Pakistan blocked a feasibility study for a 1,500 mile pipeline that would carry Iranian gas to Pakistan and India.

National Iranian Gas Co. and its Indian partners were considering alternatives, including LNG shipments to India.

The Energy Ministry said Pakistan had gas reserves of 20 tcf and produced about 700 bcf in 1998. It said demand was growing 7%/year.

Natural gas accounted for about 40% of Pakistan`s energy consumption, roughly the same level as oil. Consumption was expected to increase from 1.7 bcfd to more than 3 bcfd by 2005 and 3.7 bcfd by 2010.

Processing activity

Attock Refinery Ltd., planned was expanding and upgrading its 80-year-old refinery. The upgrade, due completion in mid-1999, was intended to hike distillation capacity by 4,500 b/d to 35,000 b/d and maximize output of premium unleaded gasoline.

Pakistan`s Caustic Soda Manufacturing Association planned to build a $100 million plant to produce polyvinyl chloride, urea fertilizer, acetic acid, and acrylic fiber.

About 100 cu m/hr of gas feed would be cracked to produce acetylene feed for the plant.

A Pakistani consortium including State Petroleum Refining & Petrochemical Corp. planned to build a $30 million single point mooring for the planned Iran-Pak refinery at Karachi. The mooring, to be built near Gadani at Khalifa Point, would accommodate tankers from Iran.

National Refinery Ltd. planned to build a $6 million pipeline from its Karachi refinery to Karachi International Airport to carry 10,000 b/d of jet fuel.