Bloomberg Article

Pakistan’s state-owned companies are spending record amounts on energy exploration, including in areas more known for separatist insurgency, as old fields start to dry up.

While global producers negotiate on further production cuts, Oil and Gas Development Co., the nation’s largest explorer, has more than doubled seismic activity, and Pakistan Petroleum Ltd. has almost doubled wells drilled in the past two years as it becomes cheaper after the global crude plunge.

“In exploration, there is absolutely no let up,” Zahid Mir, chief executive officer at OGDC, said by email on July 27. “Cost of services has come down. We see an opportunity here to do things a bit cheaply.”

The need for greater energy security and to end chronic shortages is key to the re-election prospects of Nawaz Sharif’s ruling party ahead of the national poll next year. Sharif stepped down as prime minister after the Supreme Court last month ordered his disqualification from office with a caretaker leader set up until his brother, Shehbaz, takes the helm.

Pakistan has also ramped up oil production by about 32,000 barrels-a-day, that is about a third of the nation’s total output, and also added 944 million cubic feet a day of gas in the past four years, according to petroleum minister in the Sharif government and interim Prime Minister, Shahid Khaqan Abbasi. Most of Pakistan’s oil and gas fields are old and the new findings are replacing natural declines, he said.

That need is becoming critical as Pakistan hasn’t made a discovery as large as 1 trillion cubic feet of gas in decades. Sui, the nation’s largest gas field in the restive province of Balochistan, was discovered in 1955. At that time its reserves were 8 trillion cubic feet, which was third largest in the world, Khalid Zaki, director at the Petroleum Institute of Pakistan said in an interview in Karachi.

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