Pakistan Petroleum Limited to diversify into other minerals

• Country's key supplier of natural gas is looking to export zinc and lead from next year.
• The company also aims to generate $100 million annually in revenue from its mining business.

Pakistan Petroleum Limited (PPL), the key supplier of natural gas in the country, seems to be moving away from its primary business of exploring petroleum and shifting its attention towards mining.

The company is looking to export zinc and lead from next year, according to a Bloomberg report. The change in strategy comes amid insignificant growth in domestic production. The report further states that the company aims to generate $100 million a year in revenue in next three years from its mining business.

“There is a gloomy picture if you look at the current oil and gas scenario….. We have to diversify into minerals,” said PPL Chief Executive Office Moin Raza Khan. The PPL chief informed that the company will run out of petroleum resources in nine years, until new discoveries are made.

In October, the Pakistani state-owned petroleum company announced a cash dividend of 20 percent on ordinary and convertible preference shares as well as 20 percent bonus shares to ordinary shareholders and 10 percent to convertible preference shareholders.

PPL is engaged in conducting exploration, prospecting, development and production of oil and natural gas resources. The company's current exploration and production portfolio is spread across Pakistan with international presence in Iraq and Yemen. PPL also holds mineral rights in Balochistan through Bolan Mining Enterprise (BME), a 50:50 joint operations between PPL and Government of Balochistan.

PPL's response: "The report inadvertently suggests PPL’s intent to shift from its core business of oil and gas exploration to focus instead on minerals. This is clearly far from the case as evident from PPL’s robust exploration activities planned for the current fiscal year and the years to come to replace mature depleting fields on natural decline with new ones, growing reserves at 2 percent annually. In fact, the company intends to increase its exploration expenditure by 10 percent to venture into mature as well as frontier areas along with offshore which are high risk/ high cost but more rewarding when successful. 

"As such, only 25 percent of the onshore area of Pakistan has been explored with substantial unexplored offshore basin that has been under limited activity with only 18 exploration wells drilled so far, many of which were prematurely abandoned due to mechanical/ operational reasons. Besides the country holds about 200 tcf and over 10 billion barrels of technically recoverable tight/ shale gas and oil reserves, respectively.The huge exploration and production potential in Pakistan not only makes it attractive for local E&P companies but also for leading multinationals for which various road shows have been conducted by the Ministry of Energy (Petroleum Division)."