The gushing Ghauri

This column has time and again highlighted how the E&P companies have been tilting towards oil production. And that’s probably the right thing to do when the indigenous gas reserves are depleting at a rate of knots. Recall that oil flows have been the key reason for a healthy financial performance of the E&P sector the past year.
After the successful commissioning of oil fields in recent times like Tal, Nashpa and Makori East, the next big name is likely to be Ghauri-X, an oil discovery by Mari Petroleum Company Limited in the eastern Pothohar region in Sohawa near Jhelum. Mari Gas changed its name to Mari Petroleum Company Limited not a long time back probably due to its widening production focus. With 22 million barrels reserves, the new field in District Jehlum, Punjab is likely to produce around 5,500 barrels of oil per day.
Apart from the Mari’s second successful attempt this year, high hopes are already attached to this new oil field. For an energy deficit country, it is the first hydrocarbon discovery in the Pothohar region and one of the biggest oil discoveries in Punjab.
The well’s initial recorded flow rate ranks it amongst the country’s top oil producing wells. From what Petroleum Ministry officials have reportedly said, crude oil production is set to cross 100,000 barrel mark per day from current production of 97,000 barrel per day in the country following this oil discovery.
Aside from increasing the size of energy production, there could be many more spillover from the Jhelum discovery. For one, if Jhelum discovery is only one leg of a series of more such discoveries in Punjab, it could have far reaching implications on Pakistan political economy (More on that later in our columns).
Besides being an important contributor towards local crude production, a significant hydrocarbon find in a relatively untapped area is a harbinger for improved economic activity in the vicinity. That activity goes beyond infrastructure development and employment opportunities.
Not only does the company plan to invest in road and pipeline infrastructure enhancement from the oil field to the GT road, but it also expects to start transporting its crude to the refinery very soon. Also, the plans of setting up a refinery in Sohawa are likely to lift employment opportunities in the region.
But that is not all. The Ghauri-X discovery has opened up an entirely untapped area for further exploration by E&P companies, especially when most of the Indus basin has matured. Another potential area receiving significant attention is Khyber-Pakhtunkhwa. So, as far as crude oil potential is concerned, it seems that FY15 will be another good year for E&P companies.