Improved security opens oil, gas exploration in FATA

PESHAWAR -- Improved security as a result of the on-going military Operation Zarb-e-Azb has paved the way for natural resource exploration in the Federally Administered Tribal Areas (FATA) of Pakistan.

The army launched Zarb-e-Azb in North Waziristan in June 2014 to destroy the militant threat. The operation continues today.

"Soon after the expulsion of insurgents from FATA, seismic surveys for exploration of oil and gas deposits started," said Muhammad Raziuddin, chief executive officer of the Khyber Pakhtunkhwa Oil and Gas Co. Ltd. (KPOGCL).

KPOGCL is working with the FATA Development Authority (FDA)'s Oil and Gas Facilitation Unit (OGFU) to explore natural resources in FATA, he told Pakistan Forward.

Improving tribe members' lives

"We have started two-dimensional (2D) surveys of 15 blocks of oil and gas [reserves] in FATA that have the potential to produce 20 trillion cubic feet of gas," said Waseem Ahmad, assistant director of research and development for OGFU.

Out of these 15 blocks, five of them -- Latamber, Tirah, Orakzai, Wali and Baska -- are nearing readiness for exploration, he said, adding that preparation of the blocks has created labouring jobs for the local population.

Securing exploration sites is a three-step process, he told Pakistan Forward.

First, local tribesmen where the survey is going to start are taken into confidence, he said. Authorities deploy the Levies Force, and finally the company hires security guards to protect its workers.

The tribes' economic fortunes will brighten if Pakistan taps FATA's natural riches properly, OGFU Director Azhar Mahboob said January 11 at a meeting with Khyber Pakhtunkhwa (KP) Governor Zafar Iqbal Jhagra.

"The 2D seismic survey of 15 blocks required an investment of Rs. 4.5 billion ($40.5 million)," he said.

Mahboob called on the governor's office to amend Pakistan's Petroleum Exploration and Production Policy 2012 so that FATA can receive its due share of profits and royalties earned from oil and gas exploration.

During the meeting, Jhagra directed the concerned officials to fully explore the mineral potential of the region and to ensure proper extraction so the country and the area's population can reap the maximum benefits.

Local, international companies investing

"Apart from local companies, including Oil and Gas Development Company Limited (OGDCL), international companies are showing interest in exploring oil and gas in FATA," said Raziuddin, the CEO of KPOGCL.

A number of international companies including Hungarian multinational oil and gas giant MOL Group, Kuwait Petroleum Corp. and Tallahassee (Shell) are already operating in KP and areas near FATA, he said.

KPOGCL itself has invested Rs. 100 million ($10 million) in six blocks of FATA, he said.

Al-Haj Enterprises recently launched exploration activities in KP and Punjab and has plans to explore areas in FATA as well. Similarly, in February, some Chinese companies are starting work in the Tirah Valley, in Khyber and Orakzai agencies, he said.

Pakistan produces 96,450 barrels of oil daily, of which more than 53,011 barrels -- or 55% of total production -- comes from KP, he said.

"The decision of the KP government to set up its own oil and gas company has shown very positive results and the province has earned Rs. 29 billion ($290 million) within a few years by attracting oil companies," Raziuddin said.

He expressed hope that exploration of oil and gas reserves in FATA will have a positive impact on the economy of Pakistan in general, and the tribal region in particular, and help boost the socio-economic development of the militancy-battered region.

"Oil and gas exploration will create scores of jobs for local tribesmen, which not only support them economically but protect them from falling into the hands of militant recruiters," Raziuddin said, adding that when a seismic survey starts, it creates around 1,000 jobs, mostly for unskilled workers.

"The perception of KP and FATA in the outer world is changing, and the fear factor has diminished considerably, resulting in the arrival of multinational companies to invest and explore both discovered and hidden treasures of oil and gas," he said.