ASSIGNMENT

PETROLEUM

AND GAS

IN PAKISTAN(RESOURCES, CONSUMPTION& PRODUCTION)

SUBMITTED TO

SIR ARSALAN KHATTAK

SUBMITTED BY

OSAMA TAHIR

09-EE-88

MINERALS IN PAKISTAN

WHAT ARE MINERALS:

A mineral is a solid inorganic substance formed by geological processes. There are about 3,000 known minerals, and new discoveries occur frequently. All minerals have a specific atomic structure, chemical composition and physical properties. Minerals range from pure elements to salts to silicates that can take thousands of different forms. Gemstones are attractive minerals that have been cut and polished for use in making jewelry.

Each mineral belongs to a chemical group that represents their affiliation with certain elements or compounds. Minerals also belong to a crystal structure group, and have other properties, such as hardness, color, luster, specific gravity, tenacity, and crystal habits associated with them. These and other properties are used to identify and classify them.

SOME IMPORTANT MINERALS IN PAKISTAN :

There are large number of minerals found in PAKISTAN…some of them are

Name annual production

(in metric tonnes)

1- Coal. 3,105,715

2- Oil. 23,195,048

3-Natural Gas 923,758

4- Steel. 24,322

5- Salt. 1,212,366

6- Chromite 27,458

7- Gypsum. etc. 384,513

8-Slate stone 108,182

9-Aragonite/Marble 497,317

09-EE-88 Page 2

PETROLEUM(OIL)BACKGROUND

Pakistan has been considered a petroleum province. First well was drilled in

1866 at Kundal in the upper region of Indus valley. Shallow wells were drilled in thefollowing years, and from 1886, small scale production of oil started in Khattan(Balochistan). In 1915, the first series of commercial oil discovery was made in thePotwar basin (Punjab). In 1960’s Oil and Gas Development Company Limited(OGDCL) was created by the Government of Pakistan, which provided successful trackin discovery of oil and gas reserves with in the country.

After the oil crisis in 1973, anumber of impressive discoveries were made both by the private sector and OGDCL.InJune, 2006, initial recoverable gas reserves were estimated at 52 TCF of which 33 TCFremain to be produced; oil reserves are much more modest with initial recoverablereserves of 844 million bbl and a remaining balance of 309 million bbl

09-EE-88 Page 3

Exploration of oil

According to Oil and Gas Journal (OGJ), Pakistan had proven oil reserves of 300 million barrels as of January 2009. The majority of produced oil comes from proven reserves located in the southern half of the country, with the three largest oilproducing fields located in the Southern Indus Basin. Additional producing fields are located in the Middle and Upper Indus Basins.

Oil has been produced in what is now the Islamic republic of Pakistan from the early 1920's. According to Oil and Gas Journal (OGJ), Pakistan had proven oil reserves of 300 million barrels in January 2009. A number of fields were discovered in the upper Indus basin in the 1930's and 1940's. Since around 1980 a large number of hydrocarbon discoveries have been made in the central and southern parts of the country. In 1999 there were at least 70 oil and condensate fields in production, although none of them was of any great size. Total output has fluctuated within a range of about 55 000-65 000 b/d since 1989. In 2006, Pakistan produced an average of 58,000 bbl/d of crude oil, but has ambitious plans to increase its current output to 100,000 bbl/d by 2010. According to the 2008 BP Statistical Energy Survey, Pakistan consumed an average of 362.38 thousand barrels a day of oil in 2009.

Although the level of proved reserves reported by the Pakistan WEC Member Committee has tended to drift downwards in recent years, natural gas remains a major energy asset for Pakistan. According to the 2008 BP Statistical Energy Survey, Pakistan had 2007 proved natural gas reserves of 0.85 trillion cubic metres, with the major gas-producing fields being Sui in Balochistan and Mari in Sindh. According to the 2008 BP Statistical Energy Survey, Pakistan had 2007 natural gas production of 30.8 billion cubic metres and consumption of 30.8 billion cubic metres. Pakistan’s government has plans to build a pipeline from Iran’s massive natural gas reserves to Indian markets across Pakistani territory.

09-EE-88 Page 4

CONSUMPTION

In Pakistan transport sector in the biggest user of the petroleum products whichaccounts about 48 percent followed by power generation which uses about 36 percent,and industrial sector which has a share of 12 percent while remaining is shared by theresidential sector.

The use of petroleum as a power resource is indispensable. Today, it illuminates the houses and runs ships, locomotives and factories. It is of great significance for automobiles and aero planes. As a source of lubricant petroleum has no rival.

Since the late 1980s, Pakistan has not experienced many new oil fields coming

online. As a result, oil production has remained fairly flat, at around 60,000 barrels perday (bbl/d). During the first eleven months of 2006, Pakistan produced an average of58,000 bbl/d of crude oil. However, Pakistan has ambitious plans to increase its currentoutput to 100,000 bbl/d by 2010

Due to Pakistan’s modest oil production, the country is dependent on oil imports to satisfy domestic oil demand. As of November 2006,Pakistan had consumed approximately 350 thousand barrels of oil and variouspetroleum products, of which, more than 80 percent was imported. The majority of oilimports come from the Middle East, with Saudi Arabia as the lead importer

In recent years, the combination of rising oil consumption and flat oil production

in Pakistan has led to rising oil imports from Middle East exporters. In addition, the lack of refining capacity leaves Pakistan heavily dependent on petroleum product imports.Natural gas accounts for the largest share of Pakistan’s energy use, amounting to about50 percent of total energy consumption.

Pakistan currently consumes all of its domesticnatural gas production, but without higher production Pakistan will need to become anatural gas importer. As a result, Pakistan is exploring several pipeline and LNG importoptions to meet the expected growth in natural gas demand. Pakistan’s electricit demand is rising rapidly

09-EE-88 Page 5

09-EE-88 Page 6

Companies and Organisations linked to Oil and Gas in Pakista n

Asia Marine (Pvt.) Ltd. Pakistan

NATIVUS Resources Limited

Baker Hughes EHO LTD

MOL Oil & Gas Company B.V.

Oil and Gas Development Corporation

Pakistan Oilfields Ltd.

Pakistan Petroleum Limited

Pakistan State Oil

Petronas Carigali (Pakistan) Ltd

Premier KUFPEC Pakistan B.V.

Shell Pakistan Ltd.

Sui Northern Gas Pipelines Limited

Sui Southern Gas Company Limited

MAJOR OIL FIELD:

Some important oil fields in Pakistan are

09-EE-88 Page 7

Punjab

Dhurnal oil Field (Dist. Chakwal, Punjab)Meyal Oil Field (Dist. Attock, Punjab)

Toot Oil Field (Dist. Attock, Punjab)

Chak Naurange Oil Field (Dist. Chakwal, Punjab)

Joya Mir Oil Field (Dist. Attock, Punjab)

Dhulian Oil Field (Dist. Attock, Punjab)

Khur Oil Field (Dist. Attock, Punjab)

Balkasar Oil Field (Dist. Chakwal, Punjab)

Karsal Oil Field (Dist. Chakwal, Punjab)

Adhi Oil Field (Dist. Rawalpindi, Punjab)

Bhangli Oil Field (Dist. Rawalpindi, Punjab)

Sindh

Laghari Oil Field (Dist. Badin, Sindh)Tando Adam (Dist. Hyderabad, Sindh)

Thora Oil Field (Dist. Badin, Sindh)

Dhabi Oil Field (Dist. Badin, Sindh)

Khashkheli Oil Field (Dist. Badin, Sindh)

Mazari Oil Field (Dist. Badin, Punjab)

South Mazari (Dist. Badin, Sindh)

Sono Ghotana Central Lashari

Besides the above in Sindh province at Gularchi Bobi, Pasakhi, Tajedi, Nari, Turk, Hali Pota, Ghunghro, Panero, Kunner Oil has also been discovered and experimental processes and under progress.

09-EE-88 Page 8

MAIN OIL REFINERIES

1-Pak-Arab Refinery

Pak-Arab Refinery (PARCO) is an oil refinery located in Mehmood Kot in Multan District, Punjab, Pakistan.

In September 2000, Pak-Arab Refinery largest capacity refinery of 100,000 barrels per day, costing US$ 886 million commissioned well within budget and a month ahead of schedule. The White Oil Pipeline transports imported oil from Port Qasim to Pak-Arab Refinery.

2- Pakistan Refinery Limited

Pakistan Refinery Limited is located Karachi, Sindh, Pakistan. Pakistan Refinery was incorporated in Pakistan as a public limited company in May 1960 and is quoted on Karachi and Lahore Stock Exchanges.

3- Attock Refinery.

The Attock Refinery Limited (ARL), is the pioneer in crude oil refining in the country with its operations dating back to the early nineteen hundreds. Attock Refinery located at Rawalpindi, Punjab, Pakistan

(TYPES OF OIL)

IN PAKISTAN

09-EE-88 Page 9

Organic oils

Organic oils are also produced by plants, animals, and other organisms through organic processes, and these oils are remarkable in their diversity. Oil is a somewhat vague term in chemistry; instead, the scientific term for oils, fats, waxes, cholesterol, and other oily substances found in living things and their secretions, are lipids.

Lipids, ranging from waxes to steroids, are somewhat hard to characterise, and are united in a group almost solely based on the fact that they all repel, or refuse to dissolve in, water, and are however comfortably miscible in other liquid lipids. They also have a high carbon and hydrogen content, and are considerably lacking in oxygen compared to other organic compounds and minerals.

Mineral oil

Mineral oils, found in porous rocks underground, originated from organic material, such as dead plankton, accumulated on the seafloor in geologically ancient times. Through various geochemical processes this material was converted to mineral oil, or petroleum, and such. These are classified as mineral oils because they do not have an organic origin on human timescales, and are instead derived from underground geologic locations, ranging from rocks, to underground traps, to sands.

Other oily substances can also be found in the environment; the most well-known of those is asphalt, occurring naturally underground or, where there are leaks, in tar pits.

09-EE-88 Page 10

Petroleum and other mineral oils (specifically labeled as petrochemicals) have become crucial resources to human civilization. In modern times, they are often referred to by the term of "oil" itself

Share of the petroleum products is about 40 percent of the current energy

consumption in Pakistan. This consumption has grown sharply during 1980s at rate of

almost 7 percent per annum but it has shown a decreasing trend during 1990s and later

it gained the pace during 2004-2005 at about 10 percent per annum.

The consumption of the petroleum products during 2003-04 was about

14 MTOE. This sharp decline in the consumption as compare to previous years was due

to the decreasing demand of Furnace oil (FO). As furnace oil is being used for thermal

power generation and these thermal power plants were being converted to Gas systems

and also the availability of hydro power during these years caused lower demand of

Furnace oil. This demand is expected to increase about 17 percent during 2010-11. It is

expected to further increase to around 19 million tones by the year 2017-18. Local

refinery production during 2003-04 was about 10.27 MTOE. The deficit products

import were 5 MTOE in 2003-04 while it will remain about 5-6 million tons per

annum up to year 2010-11. It is expected to increase to a level of around 8.0 million

tons per annum by the year 2017-18

NATURAL GAS

Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGC) are the two major companies of the country which are involved in purification, transmission and distribution of natural gas throughout the country. SNGPL supplies gas to

09-EE-88 Page 11

consumers in the northern part of the country. Its franchised areas include two of the four provinces of Pakistan - Punjab and Frontier. SSGC is responsible for the southern part of the country and supplies gas to customers in the remaining two provinces of Sindh and Balochistan

SUI NORTHERN GAS COMPANY LIMITED

Sui Northern Gas Pipelines Limited (SNGPL), is the largest integrated gas company serving more than 3 million consumers in North Central Pakistan through an extensive network in Punjab and NWFP. The Company has over 45 years of experience in operation and maintenance of high-pressure gas transmission and distribution systems. It has also expanded its activities to undertake the planning,designing and construction of pipelines, both for itself and other organizations. SNGPL operates in a region of the nation that has a rapidly growing demand for natural gas and power generation due to significant industrial development.

Sui Southern Gas Company Limited

SSGC was established in 1989 as a result of the merger of two gas companies - Sui Gas Transmission Company Limited (SGTC) and Southern Gas Company Limited (SGC). SGTC was formed in 1954 with primary responsibility of purification of gas at Sui Field and to transmit the sweet gas to the consumer centre in the southern part of the country. Two distribution companies established in 1955, were responsible for the distribution of gas to consumers in Karachi and in towns en-route to the transmission pipeline between Sui and Karachi. These two distribution companies were first merged in 1985 to form SGC and later in 1989. SGC and SGTC were merged together to form SSGC.

Usage:

Natural Gas is an important means of energy, especially for countries like Pakistan which are deficient in the production of mineral oil and coal.

commonly known use of natural gas. It can be used for cooking, washing and drying, water warming, heating and air conditioning. Domestic appliances are

09-EE-88 Page 12

increasingly improved in order to use natural gas more economically and safely. Operating costs of natural gas equipment are generally lower than those of other energy sources.

Commercial

Main commercial users of natural gas are food service providers, hotels, healthcare facilities or office buildings. Commercial applications include cooling (space conditioning and refrigeration), cooking or heating

Natural gas is used as an input to manufacture pulp and paper, metals, chemicals, stone, clay, glass, and to process certain foods. Gas is also used to treat waste materials, for incineration, drying, dehumidification, heating and cooling, and cogeneration.

Power Generation

Electric utilities and independent power producers are increasingly using natural gas to provide energy for their power plants. In general, gas fuelled power plants have lower capital costs, are built faster, work more efficiently and emit less pollution than other fossil fuel power plants. Technological improvements in design, efficiency and operation of combined cycle gas turbines and co-generation processes are favouring the use of natural gas in power generation. A combined-cycle power plant uses waste heat to produce more electricity, while natural gas co-generation, also called combined heat and power, produces power and heat that is useful for industry as well as commercial users. This cogeneration reduces pollution emission considerably.

09-EE-88 Page 13

The country is well endowed with natural gas. Following are some of the important gas fields:

(a) Natural Gas Deposits at Sui:

It is the biggest deposit of natural gas in our country. It is situated in Sibbi district of Baluchistan. This gas field is considered as one of the biggest gas fields of the world and gas is being supplied to different parts of our country from this field through pipe lines.

Sui gas field accounts for 26% of Pakistan's gas production. Remaining reserves are estimated to be at about 2 trillion cubic feet (57×109 m3) and the daily production is around 604 million cubic feet (17.1×106 m3). The operator of the field is Pakistan Petroleum Limited.

09-EE-88 Page 14

(b) Dhulian Gas Field:

Mineral oil has been discovered at this place in 1937,so Attock Oil Company ,while searching for more oil, found natural gas at this field in 1994.

(c) Meyal Gas Field (Dist. Attock, Punjab):

Pakistan Oil Field Ltd. Company discovered both oil and gas at this place in 1968.Gas is being supplied through a pipe line for the industrial areas around Rawalpindi.

(d) Mari-Sari -Hundi:

Mari-Sari-Hundi are also the gas fields from which gas is being supplied for various other purposes and also to three fertilizer factories.

(e) Toot Gas Field (Dist. Attock, Punjab):

Natural gas has also been found at toot and it is being used since 1980.

Recently gas has been discovered at Dhabi South Sonoro, Bukhari, Matil and Jabo in Sindh and at Makhdompur in Punjab.

Total Reserved and Production:

The recoverable reserves of natural gas are estimated at 542.505 billion cubic meters. During the first nine months of 1991-92 the production was 11543.19 million cubic mores as against 10932.92 million cubic meters during the same period in the previous year showing an increase 5.58% .The country produces about 1.5 billion cubic feet of gas per day.

09-EE-88 Page 15