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KPK: The new Energy hub of Pakistan?

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FPCCI’s presidential candidate Daroo Khan Achakzai on Saturday said oil and gas reserves in the Khyber Pakhtunkhwa province should be exploited to ensure an economic turnaround. His statements lead to speculations that KPK can become the new energy capital of Pakistan replacing Balochistan & Sindh.

“Local gas can not only change the fate of the country but it will reduce dependence on costly LNG to save foreign exchange and trigger economic activities,” Achakzai further said. He said that the province can be dubbed as a new geological frontier for oil and gas as it holds nine trillion cubic feet of recoverable gas reserves and 500 million barrels of oil which must be exploited.

The well is going through a testing phase and it is expected to produce about 30 million cubic feet of gas per day (mmcfd) and 700 barrels of crude oil per day (bpd).

Daroo Khan Achakzai said that investment in the KP oil and gas sector can trigger development, reduce unemployment and overcome militancy. He said that KP province is producing half of the oil of the total national output, 350 tons of LPG per day, while 10 percent of the gas which is also being provided to the other provinces but it’s well below the actual potential.

He said adding that some companies are actively participating in exploring activities while others companies are not playing an active role due to security considerations. The statistics largely justify the statements from the potential FPCCI chief. According to one estimate, Khyber Pakhtunkhwa has Natural Gas recoverable reserves of some 9 Trillion Cubic Feet and Oil reserves exceeding 500 million barrels.

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The presence of hydrocarbons provides various opportunities for investment in exploration, drilling, refineries, blending units and transportation. Given the high success rate of drilling i.e. 2:5 gives the Exploration & Production an impetus to enter Khyber Pakhtunkhwa. The world average is 1:10 and that of Pakistan 1:3.

Similarly, the now assimilated FATA region is also considered to be rich in oil & gas reserves. Various geological seismic surveys have revealed that around 20 trillion cubic feet natural gas can be explored in different blocks. In January, the Khyber-Pakhtunkhwa Oil and Gas Company Limited (KPOGCL) announced that it had discovered massive oil and gas reserves in the Baratai well of Kohat, where it works in a joint venture with Oil and Gas Development Company (OGDC).

In March, KPK suffered Rs600 million loss as the federal authorities reduced the production of crude oil and gas from their wellheads located in the province last December.

The well is going through a testing phase and it is expected to produce about 30 million cubic feet of gas per day (mmcfd) and 700 barrels of crude oil per day (bpd). Similarly in March, Mari Petroleum Company Limited (MPCL) has made a significant oil and natural gas discovery at an exploratory well in Karak district of Khyber Pakhtunkhwa. The well was drilled up to a depth of 5,900 meters. During the initial short duration tests carried out, the well flowed oil at the average rate of 1,425 barrels and 1.1MMSCFD of gas per day.

Khyber Pakhtunkhwa covers an area of 74,521 sq.km, which consists of 9.4% of the total country area. An area of around 144,000 square kilometers is under exploration for oil and gas throughout the country; out of which 19000 square kilometers i.e. 13.15% of the total is in Khyber Pakhtunkhwa and FATA. Ten companies are presently engaged in exploration and production activities in the Khyber Pakhtunkhwa and FATA.

Read more: CPEC: Pakistan’s quest for energy security

However, much of KPK’s potential was ignored by the Centre most ostensibly due to political reasons. In March, KPK suffered Rs600 million loss as the federal authorities reduced the production of crude oil and gas from their wellheads located in the province last December.

The local officials told Dawn that the federal authorities managing the nationwide production and supply of crude oil and gas had slashed the production of crude oil by 10,000 barrels per day and that of gas by 80 million cubic feet in Dec 2017. However, with the PTI government in place, whom many consider KPK to be their stronghold, it is expected they will move swiftly to develop the energy potential of the province.


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