Pakistan starts production from largest-ever oil, gas discovery, aims to cut imports

ISLAMABAD: Pakistan has begun commercial production from what it says is the largest oil and gas discovery from a single well in its history, the Oil and Gas Development Company (OGDC) said, as the country seeks to reduce reliance on costly energy imports.

The Baragzai X-01 well, located in the Nashpa Block in Khyber Pakhtunkhwa, is expected to help save about $329 million annually in foreign exchange by substituting imported fuels, the company said in a statement.

Pakistan depends heavily on imported energy, with oil and gas accounting for a major share of its import bill and putting pressure on foreign exchange reserves. Boosting domestic output has been a key policy goal to ease external financing constraints and improve energy security.

The well is currently producing about 15,000 barrels of oil per day and 45 million standard cubic feet per day of gas, along with 15 metric tons per day of liquefied petroleum gas, OGDC said.

Output is projected to increase to 25,000 barrels per day of oil and 60 million cubic feet per day of gas, making it the highest-producing well in the country’s history.

“Baragzai X-01 is now the highest-producing well in OGDC’s portfolio as well as in Pakistan’s history,” the company said, adding that it contributes roughly 10 per cent of Pakistan’s total crude oil production.

The OGDC said that the discovery spans five formations and was developed using advanced technology in challenging terrain. It added that an 8-kilometre pipeline was laid to connect the well with existing processing facilities.

The project is expected to generate significant revenue, with daily earnings estimated at about Rs156 million and annual revenues projected at Rs57 billion, the company said.

Petroleum Minister Ali Pervaiz Malik, who inaugurated the project, said the development would strengthen Pakistan’s energy security and reduce dependence on imported fuels.