EWT: Govt likely to allow OGDCL extension

ISLAMABAD: The government is likely to allow one-year extension to Oil and Gas Development Company Limited (OGDCL) in Extended Well Testing (EWT) over Umair SE-1 discovery Guddu, official sources told Business Recorder.

Sharing the details, an exploration licence was granted for Guddu Block on May 31, 1999 in accordance with Petroleum Exploration & Production Policy, 1997, and under the Pakistan Petroleum (Exploration and Production) Rules, 1986. Currently, the block is being operated by M/s OGDCL. The Company has so far acquired 545 Sq. Km 3D and 243 line kilometres of 2D seismic data. Based on the results of seismic data, OGDCL has made a new gas discovery in the Guddu E.L from HabibRahi Limestone and Pirkoh Limestone by drilling a well namely Umair S-E-1.

The initial test results and total in-place volumes of the discovery are as follows: gas rate, 1.063 MMSCFD, water rate 0.5 BPD, WHFP 219 Psi and choke size 32.64.

Reserve status of Umair SE-1 is: (i) HabibRahi Limestone 3.337 Gas initially in place (GIIP) (BCF) - reserves 2.336 BCF; and (ii)_ Pirkoh Limestone 1.365 GIIP (BCF)- reserves 0.956 BCF, totalling 4.702 GIIP (BSF) and reserves 3.292 BCF.

Sources said Petroleum Division has received a request from OGDCL for permission of Extended Well Testing (EWT) to appraise the said discovery over Umair SE-1 exploration well drilled in Guddu Block. The Rule-20(1) of Pakistan Petroleum (Exploration and Production), Rules, 1986 states the following: “subject to the provisions of these rules the licence gives the holder the exclusive right to undertake, within the licence area, all activities related to reconnaissance and exploration, including drilling for petroleum. The holder of the licence shall not be entitled to extract any petroleum from discoveries other than such test and early production as the Government may allow upon written request submitted by the holder of a licence provided however, that in no event, such test for early production shall cause loss of revenues for the government”.

Extended Well Testing (EWT/Test production is a technical requirement and common industrial practice to apprise oil/gas discovery to establish the extent of reservoir and to evaluate reservoir performance to declare commerciality over a discovery. The request of the company for EWT over Umair SE-1 discovery is in line with the applicable petroleum policy and rules.

According to sources, the EWT over Umair SE-1 has been examined and found in order; therefore, Petroleum Division has proposed one-year EWT over the said discovery with effect from start of production under EWT arrangements (tentative date of production is June 23, 2023) subject to the following conditions: (i) M/s OGDCL will submit Declaration of Commerciality (DoC) and Field Development Plan (FDP) over the Umair SE-1 discovery before expiry of allowed EWT period;(ii) the production taken under test production arrangement would be accounted for payment of production bonus; and (iii) company shall fulfil all other statutory obligations like rentals, training and social welfare, etc., as per applicable Rules(s) PCA.

EWT/Appraisal to be carried out over oil/ gas discoveries is a technical requirement to estimate the volumes, pressure and the extent of discovery area and also for declaration for declaration of commerciality which is a common industrial practice all over the world.

In order to expedite the approval process with the objective to enhance domestic oil and gas production in the country, Petroleum Division may be authorized to approve the request of EWT and further extensions if technically justified for exploration licences/ blocks granted under Pakistan Petroleum (Exploration and Production) Rules 1986 and Pakistan Petroleum (Exploration and Production) Rules 2001, the sources continued.

Prime Minister as the Minister In-Charge for Petroleum Division has approved submission of the proposal to the ECC after adding observations, which have been addressed.—MUSHTAQ GHUMMAN