CAPITAL: Islamabad

MONETARY UNIT: Rupee

REFINING CAPACITY: 137,325 b/cd

OIL PRODUCTION: 56,000 b/d

OIL RESERVES: 208 million bbl

GAS RESERVES: 21 tcf

Pakistan`s government maintained an active licensing program in 1997 and sought foreign sources of natural gas needed to meet rapidly rising demand.

It invited international bids for 23 blocks and awarded a series of contracts during the course of the year for blocks offered in the prior licensing round. The 1994 Petroleum Policy had improved the attraction of work in the country by, among other things, allowing oil prices to reach 100% parity with international levels and gas prices to be 67.5-77.5% of oil equivalency levels, depending on region.

Union Texas Petroleum Holdings Inc., the country`s most active international operator, planned to drill 11 exploratory wells on the Badin Block, where it began its Pakistani exploration in 1977 and had discovered proved and probable reserves totaling 320 million bbl of oil equivalent by the beginning of 1997. Through April 1, 1997, it had made 47 discoveries.

The company suffered tragedy in November 1997 when four American auditors working for it were shot to death in Karachi en route from a hotel to their office. A previously unknown group called the Aimal Secret Action Committee claimed responsibility for the murders of the auditors and their Pakistani driver. The group claiming responsibility said it was retaliating for the conviction in a U.S. court of Mir Aimal Kasi for the 1993 murders of two Central Intelligence Agency employees outside the agency`s Virginia headquarters.

The group threatened further acts of retaliation if Kasi received the death sentence, as recommended by the jury that convicted him. In January 1998, the Virginia court judge presiding in the case sentenced Kasi to death.

Import study

The government commissioned Beicip Franlab of France to study medium and long term prospects for Pakistani imports of natural gas.

The likely sources of foreign supply were Iran, Qatar, and Turkmenistan. The government had signed memoranda of understanding with governments of all three countries for import of a total of at least 1.6 bcfd of gas. It also was considering imports of LNG.

Unocal Corp., Delta Oil Co. of Saudi Arabia, and the governments of Pakistan and Turkmenistan signed a framework agreement for construction of a $1-1.9 billion gas pipeline based on gas from Turkmenistan`s Dauletabad field.

The group later expanded to include Indonesia Petroleum and Itochu Oil Exploration Co. Ltd. of Japan, Hyundai Engineering & Construction Co. Ltd. of South Korea, and Crescent Group of Pakistan. Russia`s Gazprom considered taking an interest in the group, known as Central Asia Gas Pipeline Ltd. (CentGas).

The 2 bcfd, 48 in. pipeline would cover 790 miles from Dauletabad field to Multan, Pakistan. It would transit Afghanistan, where a civil war was under way and a strict Islamic party called Taliban was in control of the government. Unocal, a subsidiary of which was to serve as development manager, said construction would not begin until Afghan politics stabilized.

A 400 mile extension of the CentGas pipeline to India, adding $600 million to the cost, was under consideration.

Processing plans

In other activity, Super Petroleum Co. of Pakistan sought to buy 150 acres from Port Qasim Authority of Karachi for a 135,000 b/d refinery. Supaveri Finance Holding Co., SPC`s parent, planned to import 130,000 b/d of crude and export the products.

In a joint venture with an investment arm of Abu Dhabi National Oil Co. (Adnoc), the government planned to build a 100,000 b/d refinery 900 km north of Karachi to produce kerosine and other products from crude from the emirate.