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Shamrock is organizing a conference for Oil and Gas industry in Pakistan. For more details, please visit Shamrock Conferences web site

Events, Gas, Oil, Pakistan

Crude Oil and Silver Futures contracts were successfully executed at National Commodity Exchange Limited (NCEL), Pakistan’s only regulated and technologically advanced platform. The newly introduced commodities are attracting volumes with Crude Oil 100 barrel futures contract amounting to US $ 615,952 (PKR 52 million) and Silver 500 ounce futures contract observing trades worth US $ 72,911 (PKR 6 Million) during the last week.

Mr. Samir Ahmed, Managing Director NCEL said “These international, US Dollar-denominated contracts now allow direct linkages to the international markets eliminating the exchange rate risk and allowing investors a pure play on commodity price itself. The contracts will add further depth and liquidity to the NCEL platform and create opportunities for new trading and advanced hedging strategies. The listing of these contracts marks an important milestone in this phase of growth for NCEL”.

NCEL is a gateway to an electronically transacted marketplace, with trading, central party clearing and settlement facility; where customers continue to rely on liquidity, price transparency and ensured settlement. The exchange is a reliable and secure platform boasting increased retail and institutional investor demand for over the counter trades and mitigating the risks of counterparty default. This provides effective hedging tools for trade, industry and other market participants who may be exposed to energy and precious metal price risks.

According to Ms. Raheela Khan, Senior Manager at NCEL, the exchange is currently providing trade facilitates in Gold, Silver, Crude Oil, IRRI-6 Rice, Palm Oil and Interest Rate Futures. “During 2009, total rupee traded volume touched 28,029,469,905 with a total of 86,883 contracts reflecting a year- over- year growth of 4485%” informed Raheela. She further pointed, Dec 09 was an exceptional month with a 5.3 billion rupees monthly volume, setting a daily average traded value of 300million rupees and marked the highest ever day trade volume record of 1.29 billion rupee. NCEL volume growth has been phenomenal in 2009 breaching ISE and nearing LSE volumes, however, volumes were mostly concentrated in gold.

In 2010, these volumes are to grow substantially with growing institutional investors and several agricultural, metals, and financial futures contracts to be listed. These new electronically-traded contracts are offered continuously for 20 hours a day from 10am to 6am, five days a week. NCEL is Pakistan’s first and only demutualised exchange with a 100% institutional shareholding. It has 290 members spread all over Pakistan.

Fore more details visit: www.ncel.com.pk or call 111-623-623

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Oil, Pakistan, Petrol

Oil and Gas Development Company Ltd (OGDCL), Pakistan’s biggest upstream oil and gas exploration company, has big ambitions to go global and invest in ventures around the globe. OGDCL has approached various international companies. Pakistan press has reported that OGDCL has been working to create an accord with Chinese companies China National Petrochemical Company and SINOPEC to explore new investment opportunities in North Africa, Far East and other smaller Arab countries. Interesting that while Pakistan continues to suffer energy problems, giants like OGDCL are planning these deals.

OGDCL forwarded the summary for the proposed joint ventures with Chinese companies to the Ministry of Petroleum, The summary has highlighted that the Chinese companies lack international exposure and modern expertise, which has prevented them from venturing into the overseas exploration sites. Senior manager of the company said that with an experience of around 46 years, OGDCL is technically sound with a highly qualified pool of professionals to undertake and supervise oil and gas exploration activities abroad.

In its quest to gain international exposure OGDCL has also signed a Memorandum of Understanding (MoU) with a Ukrainian company to carry out mineral search through latest technology n Pakistan.

The MoU with DGS Global will enable the OGDCL to locate mineral deposits including oil and gas with the support of new technology called the Remote Mineral Search and Prospecting.

This technology enables remote collection of photographs from space of areas under investigation for oil and gas. In the past several agreements were executed in North Africa, Far East, Middle East, Russian States but due to rising cost and difficult government procedures, the plan was derailed to explore these areas.

“The main factor in Algeria was that the fields were not economical and technically viable,” an official of OGDCL said.

The state-owned firm OGDCL had earlier in the year signed a technical cooperation agreement with another public sector E&P firm Pakistan Petroleum Limited (PPL) for technical cooperation in new ventures in Pakistan and abroad.

Senior officials of OGDCL said that the joint venture with PPL would provide the OGDCL access to technical information based on past experience of PPL.

Both the companies had conducted basic studies for operations in Iraq, Yemen, Oman, Algeria and Libya.

While, OGDCL has tried to enter into joint ventures with multinationals like ENI at various operations in North Africa, they lost to Russian giant Gazprom, as the price offered in the bid was too high and with less cash reserves, it was difficult to compete.

Energy, Investment, Oil, Pakistan, Policy joint venture, ogdcl

Pakistan government has raised the petroleum oil products’ prices by an amount ranging from Rs 4.37 per litre to Rs 5.61 per litre in the country for the month of December 2009.

Accordingly Oil and Gas Regulatory Authority has notified new prices of various petroleum products including petrol, kerosene oil, Light-Diesel Oil (LDO) and HOBC here on Monday, while the oil marketing companies (OMCs) have released the increased price of high-speed diesel (HSD) as it is a deregulated product.

Consumers, Oil, Petrol

Pakistan’s oil import bill has declined to $3.076 billion in first four months of current financial year against $4.856 billion in the corresponding months of previous year, registering 36.65 percent negative growth.

The import of both crude petroleum products and manufactured ones declined 49.21 and 27 percent, respectively during the months under review, Federal Bureau of Statistics (FBS) reported on Thursday.

Import of manufactured products came to $2.003 billion in the July-October against $2.744 billion in the same months of previous year. Crude petroleum products totaled $1.072 billion in the said months over $ 2.112 billion in the same period of previous year. The falling import of oil products gave much relief to government in the form of less spending on import that otherwise created grave difficulties for the government when import bill was touching its highest levels in the history of the country. Analysts said that fall in the import of petroleum products were mainly attributed to sharp decline in its price globally.

On month-on-month basis, import of oil grew 29.38 percent over the preceding month of September and when compared with the same month of previous year, its import fell by 10.68 percent.

Energy, Oil, Pakistan

The Water and Power Ministry has received an appalling 15.6 percent of total budgetary allocation for the first quarter of the current year, an amount that flagrantly disregards the critical contribution of this ministry to not only national output, but also to serious issues of households-related to water and power deficiency in the country.

The Finance Ministry provided Rs 2.8 billion during the first quarter (July-September) of 2009-10 financial year to the Water and Power Ministry as against the total committed quarterly allocation, amounting to Rs 17.85 billion. During three-day PSDP review meeting held recently, the Finance Ministry gave top priority to the Ministries of Petroleum and Natural Resources, Pakistan Nuclear Regulatory Authority (PNRA), Ports and Shipping, Communication, Population, Pakistan Atomic Energy Commission (PAEC) and Health Ministry.

The Ministry of Petroleum and Natural Resources received 85 percent of the budgetary allocations, amounting to Rs 170 million as against the request of Rs 200 million in the first quarter.

The Finance Ministry gave second priority to Pakistan Nuclear Regulatory Authority (PNRA), which received 75.1 percent of the committed funds, amounting to Rs 82.5 million as against the committed amount of Rs 109.8 million in the first quarter. The Ministry of Ports and Shipping received 72.2 percent fund releases, amounting to Rs 16 million as against the requirement of Rs 22 million in the first quarter.

Via Business Recorder

Economics, Electricity, Energy, Nuclear, Oil, Pakistan, Petrol, Water, power

Despite the economic recession, the demand for oil has gone up. As reported by Business Recorder, this rise is  mainly due to consistent rise in furnace oil demand and sharp recovery in diesel sales.

Pakistan State Oil (PSO) was the star performer in this month with stunning 44 percent oil sales growth to 1,321,000 tons due to efficient volume handling by the company. The company supplied 31,000 tons of FO per day to the thermal plants in August 2009 compared to 19,000 tons in August 2008. The PSO’s market share in furnace oil sales has increased to 90 percent in August.

According to OCAC data, Shell’s oil product sales increased by 12 percent to 226,000 tons while the sales of APL declined by 7 percent to 90,000 tons in this period. “To improve electricity generation through existing power plants, a committee was constituted on July 21, 2009 which instructed PSO to supply 35,000 tons of FO to power generation companies and this was the main reason that FO sales grew massively,” Farhan Mahmood, an analyst at JS Global Capital said. The diesel (HSD) sales also recovered sharply posting 26 percent volumetric growth during the month, led by gradual improvement in trade activities on the back of overall economic recovery, he added.

The PSO’s FO and diesel sales grew by 63 percent and 22 percent to 777,000 tons and 402000 tons, respectively. “With the recent long-term fuel agreements with Pepco and the company’s commitment to provide monthly 35,000 tons of FO to power plants during peak season, we expect FO sales of the company to reach 9 million tons in FY10 compared to 6.9 million tons in FY09,” Farhan said. Moreover, resolution of the circular debt will improve liquidity in the energy chain and hence improve OMCs ability to pile oil stocks, he added.

Oil, Pakistan, Petrol

The history and politics of oil is often the topic of books and articles. WSJ reviews a recent book Crude World.

Just as there was the Bronze Age and the Iron Age, there is now the Oil Age, and we are living through its last waning decades. Juan Pablo Perez Alfonzo, a former Venezuelan oil minister who came up with the idea for a cartel in the 1960s, called oil the “devil’s excrement.” Peter Maass, in “Crude World,” a spare, engaging work of reporting and travel writing, calls oil “black oxygen.” It is a neat phrase because, as Mr. Maass demonstrates, oil is almost as essential to our lives as the air we breathe, yet its effect on the countries that produce it, and on the super-alpha males who run the oil industry, is quite sinister. This is a dark book, though not because Mr. Maass is a pessimist—he isn’t. It’s just that his itinerary (Equatorial Guinea, Nigeria, Russia, and other benighted locales) lends itself to deep foreboding about the human condition.

Oil corrupts, Mr. Maass says, because it is an “extractive” industry. The computer business and other industries actually design and produce something, but oil is simply taken out of the ground. Thus power lies in the hands of the king, dictator or prime minister who controls the real estate and with whom all sorts of unsavory deals can be struck. Extractive industries “do most of their business in compromise-inducing countries,” Mr. Maass explains. “The problem is not that extractive industries have lower principles than other industries. The problem is that they must have better principles”—something that shareholders do not necessarily encourage. Because the number of oil fields on the planet is finite, and the oil in many of them is difficult to extract, the industry is governed by a zero-sum and aggressive realism of the bleakest sort.

Some case studies are included as well.

Then there is Nigeria, which has earned $400 billion from oil profits in recent decades; yet, as Mr. Maass tells us, “nine out of ten citizens live on less than $2 a day, and one out of five children dies before his fifth birthday.” Senegal, which exports fish and nuts, beats Nigeria in per capita income. According to the World Bank, 1% of the Nigerian population—presidents, generals, executives, middlemen and so on—have grabbed 80% of the country’s oil wealth. This is how an extractive industry operates in a politically fractured land of weak and nonexistent institutions.

Whether Mr. Maass is in the primeval, environmentally ruined Niger Delta region of southern Nigeria, or in a Venezuelan slum where “even the jobless are mugged,” or in a menacing and soulless Moscow high-rise, or among wayward, spoiled-brat Saudi youth, he shows how the trail of oil leads a traveler to either grim poverty or repulsive wealth. Oil, he seems to say, exaggerates the worst human tendencies.

Iraq is also part of the author’s itinerary. Mr. Maass acknowledges that the idea of the Iraq war being waged for oil is largely a conspiracy theory. But he suggests that behind the established motives of the Bush administration—finding weapons of mass destruction, instilling democracy, ridding the world of one of its worst dictators—the war in Iraq, on a deeper geopolitical and historical level, was indeed about oil. And I agree with him; for without oil, the importance of Iraq greatly diminishes. Without oil, there could not have been a WMD program, real or imagined, in the first place. It was oil wealth that gave Saddam Hussein such sway over the Arab masses. It was oil that held out the promise of a prosperous and democratic Iraq in the minds of those who favored regime change.

Environment, Investment, Oil, Policy curde world, politics

Salim Mastan is a UET graduate (1967). In this video he talks about Jatropha oil.

Energy, Oil, Pakistan

The removal of subsidy on power tariffs may prove to be politically difficult to implement for the government of the day as the people as the consumers were already allergic to the quality of services of the utility companies as well as exorbitant electricity prices impairing economics of the small and medium business especially in the face of depressive economic activity and slowdown. In this backdrop, the planned power tariff hike of 10% in October remains the second major milestone for a sustainable resolution of inter-corporate debt. It may be mentioned that the government’s latest decision to hike petroleum product prices by 7-8% in the latest monthly price review has drawn severe criticism from all corners of the country and as well as the media and opposition alike.

However while the trade and industry and general consumers were making hue and cry over recent hike in petroleum prices, the Oil Marketing Companies, particularly Pakistan State Oil (PSO), stand to benefit from strong inventory gains and firm margins.

The latest revision in prices reflects the impact of both international prices (up 10% Mom) and weakening of the Pak Rupee (3%). While the government has fixed HSD margins at Rs1.35/litre or US$2.6/bbl (40% of total volume), margins on furnace oil (deregulated) and gasoline (4% of ex-refinery prices) should increase by 2% and 10% respectively.

Via Pakistan Observer

Consumers, Electricity, Infrastructure, Oil, Petrol