KARACHI, July 14: Mari Gas Company Limited — a stock market listed company — announced on Monday that the company along with the largest French multinational Total and its other contracting partners, viz., Petronas Cargall of Malaysia, OMV of Austria and OGDCL of Pakistan, had signed Pakistan’s first-ever Production Sharing Agreements (PSAs) on July 3.

The PSAs signed with the Government of Pakistan, related to the petroleum exploration in two blocks located in ultra-deep waters of Indus Delta. The company stated that the signing ceremony that took place in Paris, France, was also attended by the President General Pervez Musharraf.

The information was conveyed to the stock exchange for information of investors, to comply with the regulation No.28 (c) of the listing regulations of the bourse and the code of corporate governance.

Giving further details, Mari Gas stated that the PSAs were for purpose of petroleum exploration in the two Offshore Indus Blocks, i.e. Block “G” No.2265-1 covering an area of 7,466 kilometres and Block “H” No.2165-1 covering an area of 7,130 kilometres, both located in Indus Delta south of Karachi at a distance of around 175 kilometres in the water-depth ranging between 2,500 to 2,800 meters. “These Blocks lie in physically challenging environments where the latest and cutting edge technologies would be employed”, the company said.

Mari Gas observed that as a part of firm work obligation a sum of $10 million had already been spent on seismic, geological, geophysical and related works. “The consortium of companies has now made an additional commitment to drill at least one exploration well during upcoming fair-weather window starting October 2003, which will involve a further investment of over $30 million”, the company said and added that it would be the first-ever well drilled in the ultra-deep waters of Pakistan.

Mari Gas said that depending on the results of the well, further seismic and/or exploration well might be undertaken in the second “H” Block. “And in the event of commercial discovery, it will not only lead to further investment which can range as high as $2-3 billion for field development, but would also provide fillip to exploration in the vast under-explored offshore areas of Pakistan”, said the company, concluding: “The potential of which is yet to be assessed and realized”. It may be mentioned that Mari Gas Company is the main supplier of gas to five plants of the three fertilizer companies and Wapda’s thermal power unit at Guddu. Pakistan ranks as the sixth largest producer of urea in the world. And 70 per cent of all urea produced in the country, uses gas supplied from the Mari Gas Field.

Gas was discovered at the Mari Gas Fields in 1967. The company boasts the largest single gas reservoir in the country. Current production is about 425 mmcfd and the reserves are estimated to last another quarter of a century; by contrast, gas reserves at the more famous Sui, are believed to be as much as to last another 10 years at a daily production of 640 mmcfd. Two exploratory wells were drilled in 1997-98 and the effort resulted in discovery of a new and independent reservoir in Goru B formation of Mari Gas Field.

Total balance sheet footing of Mari Gas Company Limited, at December 31, 2002 stood at Rs5.392bn. Paid-up capital of the company amounted to Rs367.5m. Including reserves and surplus, the shareholders’ equity stood at Rs1,585m on December 31, 2002, which produced the break-up value of Rs43.13 per share.

The 10-rupee share in Mari Gas Company has climbed by Rs20.15 or 38 per cent in the six months since January, from Rs53.50 to Rs73.65, currently, outperforming the KSE-100 index by 6pc.