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OGDCL plugs dry hole

PROJECTS & PAKISTAN’S state-owned Oil and Gas Develop-
COMPANIES ment Company Ltd (OGDCL) has plugged and
abandoned a dry hole on the onshore Guddu block,
junior partner Jura Energy revealed last week.
The Canadian independent said on August 20
that the Umair NW-1 exploration well, which was
drilled to the total depth of 804 metres, had failed to
produce commercial quantities of oil or gas.
It said: “Based on the hydrocarbon shows gas (LNG). Prior to the COVID-19 pandemic,
during drilling, log results and interpretations, it which has smashed industrial and commercial
was concluded that gas accumulations existed in gas demand around the globe, BloombergNEF
the targeted Pirkoh and Habib Rahi Limestone projected that Pakistani LNG imports could rise
formations of Eocene age. Testing did not, how- by 80% between 2019 and 2023.
ever, yield commercial quantities of gas from The government has been trying to attract
[either formation].” more foreign investment into its eager sector,
OGDCL owns 70% of the block, while Jura approaching Japan to discuss possible partner-
holds 13.5%, IPR Transoil has 11.5% and Gov- ships. Special Assistant to the Prime Minister
ernment Holdings owns 5%. on Petroleum Nadeem Babar met with Japanese
Drilling on the block, which covers around Ambassador Mastuda Kuinori on August 24 to
2,093 square km of the prolific Middle Indus discuss areas of possible bilateral co-operation in
Basin, began in July. At the time, Jura noted that the energy and petroleum sectors, Pakistan Point
the acreage was close to major industrial gas News reported.
markets and infrastructure. The two officials discussed investment
The dry hole is a blow to the country’s opportunities in the upstream industry as well as
upstream hopes, with the government eager to opportunities within the LNG, liquid petroleum
encourage upstream development to help off- gas (LPG), strategic petroleum reserve (SPR)
set a growing dependence on liquefied natural segments and oil trading segments.™

Petronet reportedly considering

scaling back Tellurian investment

FINANCE & INDIA’S Petronet LNG is reportedly consid- $2.5bn in an 18% equity stake in the project.
INVESTMENT ering scaling back a proposed investment in The MoU expired in June, with the two com-
US-based Tellurian’s Driftwood LNG project, panies failing to finalise a definitive agree-
which had previously been pegged at around ment in the wake of a major market downturn
$2.5bn. This comes after Tellurian redesigned caused in part by the COVID-19 pandemic.
the first phase of its Driftwood plan, reducing However, talks between the two companies
its cost by around 30% from $28bn by defer- were subsequently renewed in July.
ring three planned gas pipelines to serve the On August 18, comments from Petronet’s
terminal, among other steps. managing director and CEO, Prabhat Singh,
On August 16, India’s Economic Times cited reported by the Hindu Business Line, appeared
sources familiar with the matter as saying the to back up the reports in the Economic Times.
reduced scope of Driftwood’s first phase had “We are exploring the market. But one thing
prompted Petronet to re-evaluate its investment is sure: that investments as such are not look-
plan. The company will reportedly make a deci- ing lucrative at this point of time,” Singh was
sion on this soon, ahead of a December deadline quoted as telling journalists. He went on to note
for finalising an agreement with Tellurian. that spot LNG prices had fallen close to $3 per
It has not been smooth sailing for Petronet million British thermal units ($82.98 per 1,000
and Tellurian since they first signed a memo- cubic metres), while under long-term contracts
randum of understanding (MoU) in Septem- prices remain at around $4.50-5.50 per mmBtu
ber 2019. The initial terms of the MoU called ($124.47-152.13 per 1,000 cubic metres). This
for Petronet to negotiate the purchase of up makes it more challenging for sellers to negoti-
to 5mn tonnes per year (t/y) of LNG from ate offtake deals with buyers that have a range of
the Driftwood terminal, as well as investing sources to choose from.™

Week 34 27•August•2020 www. NEWSBASE .com P7