New oil reserves discovered in Sindh

[KingMamba]

Yes its little but still amounts to $14 millions in foriegn exchange saving @ $80/barrel...

@Syed.Ali.Haider will attest that $14 is nothing.

 

[Shot-Caller]

Looks like the oil & gas drive is going well.

Im a little confused, In Pakistan, if oil is found on a private property does it still belong to the owner or does it become state property?

 

[VCheng]

Im a little confused, In Pakistan, if oil is found on a private property does it still belong to the owner or does it become state property?

I am not sure, but I think the State has the mineral rights even on private property, a legacy of the old colonial laws. Owners may get a small royalty as determined by the State authorities.

 

[The SC]

@Syed.Ali.Haider will attest that $14 is nothing.

$14 million is at least good to further the search for other wells and pay the current operational costs of the found well.

 

[AZADPAKISTAN2009]

If its in sindh you know there will be no action as PPP leeches live there

 

[niaz]

Sir, a field may be viable at low production levels only if it has previously delivered much larger volumes to justify developing it in the first place. As productivity tapers off, the existing machinery is enough to keep it viable without additional development. Trying to initially develop a well with a peak output of 400 bbl per day may be a nonviable scenario.

Sir, a field may be viable at low production levels only if it has previously delivered much larger volumes to justify developing it in the first place. As productivity tapers off, the existing machinery is enough to keep it viable without additional development. Trying to initially develop a well with a peak output of 400 bbl per day may be a nonviable scenario.

Fields are shut down once cost of production & transportation to the refinery exceeds economic level. I also have a friend who buys shut down fields and operates the same average well producing only about 100 bbl. per day. However your comments are correct.

This is a hypothetical discussion a we are basing everything on a sketchy report on a single well. We don’t know how deep it is and there is no data available on the total recoverable oil in place at this field

Oil flow per well depends upon many factors such as permeability of the rock & the viscosity of crude, the gas present (gas/oil ratio) and pressure from pressure from the adjacent water and other natural pressures surrounding the reservoir. We would need to drill to a couple more wells for accurate determination of size of the reservoir and total recoverable oil in place. Being a very small field I would presume it to in the 3 to 5-million bbl. range which means it is good for 20 years.

As a very rough guess, the oil was probably found at about 6,000 ft.; cost of drilling should not be more than about $5-million. Assuming 4 dry holes and expenditure on geological survey; guestimate of the cash outlay would be between $25 to $30-million on this field.

It is an OGDC field and wholly gov’t owned. 480 bbl. per day production means about 170,000 bbl per year. Even if we assume $30 per bbl. production cost, it means net income of about $8.5-million per year or 28% return for 20 years.

I would say it is commercially viable.