Russia offers stakes in its Nigeria oil, gas fields | The Express Tribune

ISLAMABAD:

Russia has offered Pakistan stakes in its oil and gas fields in Nigeria, a move that will help secure energy supplies and ease pressure on foreign exchange.

Russian energy giant Gazprom wants Pakistan’s largest oil and gas explorer – Oil and Gas Development Company Limited (OGDCL) – to enter into joint ventures in its overseas oil and gas exploration projects.

At present, Pakistan produces 15% of crude oil locally whereas remaining needs are met through expensive imports that build pressure on foreign exchange reserves.

Earlier, Pakistan Petroleum Limited (PPL) tried to explore oil and gas in Iraq but that venture did not yield any result. Now, a Pakistani delegation, led by Petroleum Minister Ali Pervaiz Malik, which is on a visit to Russia, has informed Moscow that Pakistan is interested in getting stakes in the fields that are already being developed to avoid risks.

Ali Pervaiz Malik, who had replaced former petroleum minister Musadik Malik, was keen to address issues of oil and gas sectors. OGDCL Managing Director Ahmed Hayat Lak is also part of the delegation.

Sources told The Express Tribune that the petroleum minister held a meeting with the chief executive officer of Gazprom, a Russian company responsible for overseas investment in oil and gas fields.

During the meeting, the CEO of Gazprom offered Pakistan’s petroleum minister to form joint ventures between OGDCL and Gazprom in those fields which were being operated by the Russian company outside Pakistan and Russia.

At present, Gazprom is operating in different countries such as Bangladesh, Vietnam and Nigeria. He informed the Pakistani side that OGDCL could enter into a joint venture with Gazprom in any field.

Pakistani companies including OGDCL, Mari Petroleum, Pakistan Petroleum Limited (PPL) and Government Holdings Private Limited (GHPL) had also formed a joint venture with a state-owned firm of the UAE in Dubai in an offshoring block.

The UAE had offered a field to Pakistani companies, which had already been developed to avoid risks and was not a new block.

Sources said that the Pakistani side informed the CEO of Gazprom that it was not interested in those blocks which had not been developed so far and wanted to follow the Dubai project model. Pakistan wants to get stakes in those fields which have already been developed by Gazprom.

According to sources, Gazprom offered the petroleum minister to buy stakes in a developed hydrocarbon block in Nigeria, where no risk was involved. It proposed that Gazprom, a Nigerian state-owned company and OGDCL could become partners in that field.

Sources said that the Russian company would now send a proposal to OGDCL for evaluation as it would be a pure commercial deal. The Pakistani side had already offered Russia to become part of OGDCL’s bid for offshore drilling in Pakistan.

Officials say a joint venture with Gazprom in Nigeria will also become a base for engaging the Russian company in offshore drilling in Pakistan.

OGDCL and other Pakistani companies have already reached an understanding with a Turkish firm to offer a joint bid for an offshore exploration field in Pakistan.

Officials say Pakistan is also looking towards the Russian firm to become its partner in this venture. Russia has been struggling to establish a firm footing in Pakistan’s energy sector for the last one decade but it has not been able to achieve success.

It was also working with Pakistan to build an LNG pipeline from Karachi to Lahore for transporting imported gas. However, US sanctions on Russian firms were a key hurdle, which could not allow implementation of the project.

The structure of Pakistan Gas Stream Project was changed almost six times to avoid US sanctions but nothing could provide successful. Now, Gazprom has offered Pakistan to become a partner in oil and gas fields in Nigeria. Pakistan is hopeful that this joint venture could become successful.