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Khyber Pakhtunkhwa

Khyber Pakhtunkhwa’s mountainous regions either in Hazara Division, Kohat & Karak, Swat or Dir have a great significance in the wake of untapped deposits. These deposits are Mines & Minerals, Oil & Gas or Tourism.

Unlike mountainous region of Hazara, Swat & Dir the Mountains of Kohat and Karak have a different history. Allah has blessed this mountainous and barren land with huge rich deposits of Oil/Gas. Exploration of Oil/Gas at Chanda, Mela in District Kohat and Makori, Manzalai, Nashpa and Mamekhel in District Karak, Maramzai in District Hango has registered Khyber Pakhtunkhwa as newest and hottest geological frontier in the Country. Production of Oil in the above mentioned Southern Region is more than 50% of the total production in Pakistan. Similarly, gas is over 15% of the total gas and 25% of high value LPG. Due to Oil production, Khyber Pakhtunkhwa is to enable Pakistan to break the psychological Barrier of 100,000 barrels a day.

Exploration of Oil/Gas in Southern belt of Khyber Pakhtunkhwa has opened a new avenue of economic development in Khyber Pakhtunkhwa. Daily production of Oil in Khyber Pakhtunkhwa is above 46,000 bpd, 400 MMCFD of Gas and 500 TPD of LPG. Khyber Pakhtunkhwa has 9 TCF recoverable reserves of Gas and 600 MMBBL of Oil. Overall drilling success ratio in Khyber Pakhtunkhwa is 1:2.8 whereas world average is 1:10. OGDC and MOL (A Hungarian Co.) are two main exploration and production stake holders.

A glimpse of fresh exploration can be seen as:

OGDC has the largest stake in the exploration of Oil/Gas activities in the region. Chanda Oil field was the first major discovery in Khyber Pakhtunkhwa in 1999. MOL has the second largest stake in Khyber Pakhtunkhwa. MOL discovered Makori and Manzalai Oil field in Tal block in 2002 and 2005 respectively

Oil/Gas Production during 2013 - 14 & 2014 - 15 by M/S MOL & OGDC is given in the following table:

Revised & Estimated Oil and Gas Production for the Year 2013-14 & 2014 – 15

The Government of Khyber Pakhtunkhwa is in receipt of Revenue PA on the following:

Royalty on Oil
Royalty on Gas
Gas development surcharge
Excise duty on Gas

Royalty on Oil/Gas is payable by the exploration and production companies to the Government @ 12.50% of well head value. Receipt on account of royalty on Oil/Gas and other component is a major source of income of Khyber Pakhtunkhwa. During 2015 -16 the Provincial Government is likely to receive Rs. 19,413 million whereas the size of receipt in 2014 - 15 was Rs. 29,363 million.

The Provincial Government has decided to transfer 10% share of receipt on account of Oil/ Gas receivable from the Federal Government to the respective District where Well heads of Oil/Gas are located. 10% share is utilized on electricity, supply of gas, education, technology, water supply scheme, road, health, construction of small dams & purchase of land for higher educational institution. Subject 10% share is over and above the district and provincial ADP. Subject share is playing a major role in the uplift of respective areas. In the wake of 18th Amendment, the GoKP has established an Oil & Gas company titled “Khyber Pakhtunkhwa Oil & Gas Co (KPOGCL)”. It is in fact a matter of pride that Khyber Pakhtunkhwa is first Province to have established Provincial Oil/Gas Company. Beside it is for the first time in the history of Khyber Pakhtunkhwa, a fully independent KPOGCL Board has been established having its Chairman and most of the Members from Private Sector.

KPOGCL is headed by one of the renowned Oil & Gas expert Mr. Raziuddin (Razi) who had been MD - OGDC & CEO, Attock Refinery Ltd. The main objective of setting up KPOGCL is to facilitate investors in geological and geophysical studies, feasibilities, data mining, seismic data, acquisition, interpretation, well planning, drilling, well completion, EPC and production. KPOGCL is also the Provincial holding company of Khyber Pakhtunkhwa. KPOGCL offers 5% to 49% non-operatorship JV in sixteen concession blocks of Khyber Pakhtunkhwa with IRR ranging for 30-45%. These concessions are owned by both public & private sector companies.

Khyber Pakhtunkhwa holds promise for new exciting discoveries, particularly in Kohat basin which has become main area focus after successful discoveries by OGDC and MOL. Most of the area of Khyber Pakhtunkhwa is still lying unexplored having great potential of future hydrocarbon prospects in Khyber Pakhtunkhwa.

The so called “Kitchen” in Khyber Pakhtunkhwa is ten time, thicker than Potohar. The latter has been producing Oil/Gas for the last 150 years hence promises in Khyber Pakhtunkhwa are much greater.

Khyber Pakhtunkhwa covers an area of 74,521 km2 registering 9.4% of the total Country area. An area of round 1,44,000 km2 is under exploration for Oil/Gas throughout the Country, out of which 19000 km2 i.e. 13.15% of the total is in Khyber Pakhtunkhwa & FATA. The Government of Khyber Pakhtunkhwa is investing bullishly in Oil/Gas sector. 50,000-barrel crude Oil per day worth Rs. 300 million is being transported from Khyber Pakhtunkhwa to Punjab for refining every day. Two years before crude oil production in Khyber Pakhtunkhwa was 30,000 bpd thus a whopping 66% increase in two years. Similarly, Gas production has also increased to 400 MCF per day. Due to Government of Khyber Pakhtunkhwa catalyst chemistry the LPG (cylinder gas the most costly fraction of a barrel of Oil) production has gone up from meagre 10 tons per day to 470 tons per day.

KPOGCL a Provincial Government holding company is operating on fast track basis as one window operational facility. Government of Khyber Pakhtunkhwa approved whopping equity investment of Rs. 7 billion into KPOGCL, for next three years showing a firm commitment and dedication for sustainable energy security of Pakistan. Khyber Pakhtunkhwa Government will further invest Rs. 1.42 billion as equity in KPOGCL, a land mark in the Country’s history.

KPOGCL is seeking expression of interest from national/international exploration & production companies interested in participating as joint venture partners in the following blocks.

Laki Exploration Block (1084.87 km2)
D. I. Khan East Exploration Block (446 km2)
D. I. Khan West Exploration Block (300 km2)
Nowshera Exploration Block (2136 km2)

KPOGCL in its capacity as a provincial holding company will facilitate the exploration and production activities whether technical or non-technical at every stage. It is worth mentioning that a number of drilling rigs have increased 10 as compared to just two years ago and two robust seismic crews of 600 professionals have landed in Khyber Pakhtunkhwa which is a testimony of Khyber Pakhtunkhwa success in the corporate system. Government of Khyber Pakhtunkhwa is also planning to procure state of the art drilling rig and seismic recorder.

Oil/Gas production of Khyber Pakhtunkhwa is going to change the fate of Khyber Pakhtunkhwa. All it is blessing of Almighty Allah who has granted this opportunity in the areas having naked mountainous region apparently barren and of no use at all.

Khyber Pakhtunkhwa Board of Investment and Trade (KP-BOIT) cordially invite local/foreign investors to come forward to avail investment opportunity in Oil/Gas Sector having considered the following