ISLAMABAD, Jan 10: Federal Minister for Petroleum and Natural Resources, Chaudhry Noraiz Shakoor, on Friday announced the discovery of oil and gas from the Bhulan Shah well, drilled by the Oil and Gas Development Company Limited (OGDCL), located between Hyderabad and Mirpurkhas in Sindh.

Speaking at a news conference here, he said, it was the seventh oil well discovered in the past nine months in the Southern Indus Basin and the eighth since March, 2001.

He said the OGDCL was pursuing an aggressive exploration programme, thereby, steepening the graph of discoveries, adding that the Bhulan Shah structure was delineated, drilled and tested by the OGDCL in-house expertise in the Nim exploration licence area.

He said that significant hydrocarbons reserves had been found at the Bhulan Shah, which is located some 24kms southeast of Hyderabad city.

The Nim Exploration Licence is a joint venture of the OGDCL and the Government Holding Private Limited with working interests of 95 per cent and five per cent, respectively, under the operatorship of the OGDCL, he said.

An exploratory well, Bhulan Shah-I, was drilled down to the depth of 2,367 metres, targeting to test the potential of the top sands of the lower Goru formation of the Cretaceous Era. On the basis of drilling and log analysis, two zones were selected for testing the well.

During initial testing in zone-1, the well had flowed 260 barrels of condensate per day and about 8 MMCFD of gas through 32”/64” choke. The well-head pressure was recorded at 1,500 PSI.

This discovery, he said, would help in an annual import substitution worth $12 million.

He said that the potential of the additional zone-2 of the Goru sand member in the well, to be tested shortly, was expected to add to the hydrocarbon quantity substantially.

All the eight discoveries would produce about 9,200 barrels of oil and 66 million cubic feet of gas per day, which would contribute $157 million per annum towards import substitution, he added.

Shakoor said the OGDCL had already embarked upon efforts to tap these discoveries by developing the required infrastructure on a fast-track basis, for which preliminary survey was already under way, in addition to negotiations with gas companies.

The foreign exchange savings from the current production was worked out to be $1.42 billion per annum, he said.

Through its ongoing projects, the OGDCL was looking forward to yield an additional output of 6,500 barrels of oil, 180 MMCFD of gas and around 150 tonnes of liquefied petroleum gas (LPG) per day by end of June, 2003, which would further add to the import substitution worth $277 million per year, he said.

OGDCL has identified 25 exploratory prospects in its own operated concessions and is likely to drill 21 wells, including 16 exploratory wells by June, 2003, of which 12 exploratory wells have already been drilled.

The minister said that the company’s financial health had consistently improved in recent years with the return on capital employed more than doubling from 15 per cent in 1998-99 to over 31 per cent in the year 2001-02.

Gross sales revenue, which was Rs18.2 billion in 1998-99, jumped in 2001-02 to over Rs50.1 billion.

The contribution to national exchequer which totalled Rs4.9 billion, comprising royalties Rs1.7 billion, government levies Rs2.8bn and Taxes Rs0.4bn, registered substantial increase by the year 2001-02 to total over Rs21.7bn, which included Royalties Rs4.6bn, government levies Rs8.2bn and Taxes Rs8.9bn.

OGDCL has paid to the government dividend payments totalling over Rs20.6 billion during the period 1998-99 to 2001-02 which translates to 192 per cent of the issued Share Capital.

In addition, an interim dividend at the rate of 93 per cent amounting to Rs10bn has also been paid to the government for the current year 2002-03.—APP