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Friday, April 19, 2024

ECC green-signals a $400mn exploration attempt in Abu Dhabi

A consortium of four Pakistani state-owned companies namely MPCL, OGDCL PPL, and GHPL, will invest $400 million in exploration attempts in Abu Dhabi. The ECC decision would allow these four companies to issue guarantees to the SPV in favor of Adnoc and SCFEA to qualify.

Economic Coordination Committee (ECC) of the cabinet presided by Finance Minister Shaukat Tareen has on Monday green-signaled the consortium of Pakistan’s leading petroleum exploration and development (E&P) for $400 million exploration attempt in Abu Dhabi, United Arab Emirates.

“Petroleum Division regarding no objection certificate for issuance of the parent company guarantees/corporate guarantees by each of the consortium companies, on a joint and several bases, in favor of Abu Dhabi National Oil Company (Adnoc) and the Supreme Council for the Financial and Economic Affairs (SCFEA) to pursue international exploration and production opportunity in Abu Dhabi, UAE,” Dawn reported, quoting an official statement.

The said consortium of leading public sector E&P companies comprises Oil & Gas Development Company Ltd (OGDCL), Pakistan Petroleum Ltd (PPL), and Mari Petroleum Company Ltd (MPCL) along with Government Holdings Pvt Ltd (GHPL).

The four companies have formed a Special Purpose Vehicle (SPV) called NewCo with 25pc shares worth $100 million held by each over a period of five years in the UAE exploration block.

Besides a share of investment, the consortium is required to provide a parent company guarantee for all obligations for the NewCo under the definitive agreements to Abu Dhabi National Oil Company and Supreme Council for Finance and Economic Affairs (SCFEA).

The final approval will be awarded by the Supreme Council for Finance and Economic Affairs (SCFEA) of the Emirate of Abu Dhabi.

The ECC decision would allow these four companies to issue guarantees to the SPV in favor of Adnoc and SCFEA to qualify for the exploration block for which the bid has already been submitted by the consortium, Dawn wrote.

The ECC around two years ago had allowed NewCo to use their initial investment out of their own resources to go for the Abu Dhabi exploration.

Moving forward to two months ago, the members of the consortium reported to PSX that each company would invest $100 million if the bid is successful, otherwise, the NewCo would be dissolved.

It is worth mentioning that Pakistan Petroleum Limited has expanded its exploration portfolio not only within but beyond Pakistan’s borders.

Dawn reported that that along with its partners, PPL had drilled 79 exploratory wells including a well in Iraq, adding 0.6 trillion cubic feet (TCFs) of gas to the company’s reserve base.

Read More: Pakistan ready to open new areas for oil and gas exploration

Based on existing data about the prospective wells from detailed petroleum system studies, seismic surveys, log files, and core samples from appraisal wells, estimates suggest these new blocks could hold multiple billion barrels of oil and multiple trillion cubic feet of natural gas.

Some of the blocks already have discoveries, and within the combined area there are 290 targeted reservoirs from 92 prospects and leads. In addition to the country’s conventional potential, one of the offered blocks is expected to contain significant resources.