What is a Feasibility Study in Oil and Gas?
A feasibility study is an assessment that determines the likelihood of success or failure of a proposed project. The company's mission requires conducting a qualitative study to analyze the factors relevant to the project, such as technical, economic, and legal considerations. The feasibility study can also identify current and potential future issues and problems that could arise from pursuing the project. And that is to be able to finally reach an assessment that gives it an answer to the most important question, is this project worth the investment?
Feasibility study in oil and gas also helps companies manage oil and gas projects, including determining how it will operate, potential obstacles, competition, market analysis, and the amount and source of financing needed to grow the business. They can help develop marketing strategies to convince investors and banks that investing in a particular project or business is a wise choice.
Once the feasibility study is complete, stakeholders should be able to understand all aspects of the project fully and can then determine whether or not they want to move forward with the project!
What is the Importance of a Feasibility Study in Oil and Gas?
Feasibility study in oil and gas is extremely important when contemplating the undertaking of a new project. This is due to several reasons, including:
· Identifies valid reasons to advance or veto a project idea
· Improves the focus of the project team on objectives
· Provides useful information for the next steps after the study
· Narrows potential business alternatives
· Evaluate current and needed resources and technology
· Enhances the success or failure rate of the project by assessing all variables
· Estimates the return on investment
Return on investment, or ROI, is a mathematical formula that investors can use to evaluate their investments and judge how well a particular investment has performed compared to others.
ROI measures the return on an investment relative to its cost. The ROI formula is straightforward, but its application can be varied, reflecting its broad applicability across different types of investments, including digital marketing, social media campaigns, and technology projects is calculated by dividing the net income from an investment by the original cost of the investment, the result of which is expressed as a percentage using the following formula.
ROI = net income ÷ cost of investment × 100
What are the main steps of a feasibility study in oil and gas?
The feasibility study for any new project, particularly (feasibility study in oil and gas projects), follows a set of key steps to complete the study. They are below:
1- Conduct a Preliminary Analysis
The primary purpose of the preliminary analysis is to screen project ideas before extensive time, effort, and money are invested. Two sets of activities are involved.
· The First Set
It includes describing or outlining possible the target markets, unique characteristics of services, and scope of work by answering such questions, including:
· Does the project serve a currently unserved need?
· Does the project serve an existing market in which demand exceeds supply?
· Can the project successfully compete with existing projects in the same market, in terms of price, location, and availability?
· The Second Set
It includes determining whether there are any insurmountable obstacles and problems. If the answer is “yes”, then it indicates that the chance of success of the project is slim as the problems increase:
2- Prepare a Projected Income Statement
Anticipated income must cover direct and indirect costs, taking into account the expected income growth curve. Such Factors that determine this statement are services provided, fees for services, volume of services, and adjustments to revenues.
3- Conduct a Market Survey
A good market survey is crucial. If the company does not have several experts working in this field to conduct this survey, an outside firm should be hired. The primary objective of a market survey is a realistic projection of revenues relative to global market conditions. The main steps include:
· Define the geographic influence on the market.
· Review population trends, demographic features, cultural factors, and purchasing power in the community.
· Analyzing the services provided by competing engineering firms in the market to determine their major strengths and weaknesses. Factors to consider include pricing, product lines, promotional activities, quality of service, consumer loyalty and satisfaction, and sales.
· Estimate expected market share.
· Estimate market expansion opportunities.
4- Plan Business Organization and Operations
At this point, the organization and operations of the business should be planned in sufficient depth to determine the technical feasibility and costs involved in start-up, fixed investment, and operations. Extensive effort is necessary to develop detailed plans for Equipment, Merchandising methods, Facility location and design, Availability, and cost of personnel, Supply availability, and Overhead (e.g., utilities, taxes, insurance)
5- Prepare an Opening Day Balance Sheet
The Opening Day Balance Sheet should include the project's assets and liabilities as accurately as possible at the time the project begins, and before it becomes profitable.
Therefore, a list of assets required to carry out project operations must be prepared. The list should include items, sources, costs, and available financing methods.
6- Review and Analyze All Data
This review is critical. You Reexamine the Projected Income Statement and compare it with your list of desired assets and the Opening Day Balance Sheet. Given all expenses and liabilities, ask yourself, does the Income Statement reflect realistic expectations?
Never lose sight of analyzing risks and contingencies. Consider the possibility of significant changes in the current market that could alter expectations.
There are four types of risk analysts:
· Credit risk analysts: They analyze risks associated with customers who don't pay for products or fail to reimburse their loans. Credit risk analysts work for commercial and investment bankers and rate agencies or credit card lenders. They may also find employment with mortgage firms, insurance carriers, or other financial service providers.
· Market risk analysts: They study the stock market's potential impact on their company's share prices. They often work for various financial institutions or investment companies or in the energy industry.
· Regulatory risk analysts: They assess the effect that new regulations or changes in legislation may have on the stock market and their organization's business or sector.
· Operational risk analysts: They help an organization prepare for risky operational situations, such as product malfunction or employee fraud, and prepare contingency plans to manage those risks.
7- Make a "Go/No Go" Decision
All preceding steps have been aimed at providing data and analyses to decide whether to proceed or not. If the analysis indicates that the company should yield at least the required minimum income and have the potential for future growth, then it is a "positive" decision to start (Go). Any indication indicating otherwise, should be withdrawn (No Go) and not to take risks.
Additional considerations are taken into account when making a decision:
· Is there a commitment to make the necessary sacrifices in the future in terms of time, effort, and money?
· Will the project satisfy long-term aspirations?
What are the most important types of the feasibility study in oil and gas projects?
There are numerous feasibility studies that the consulting team can perform before the company decides to implement the project on the ground. Among the most important feasibility studies in oil and gas are the following:
· Technical Feasibility:
Technical feasibility includes studying and checking for accessibility to technical resources within the organization. So, if those resources already exist, you must then determine if the technical team can customize the technology into new working systems for the project. It is not only about the right technical resources, but the equipment and devices also need to be evaluated to ensure they have the proper hardware and software for the proposed plan.
· Economic Feasibility
The economic feasibility includes everything economic and financial for the project. This feasibility allows the company to prepare and analyze a cost-benefit statement. This helps provide decision-makers with a detailed list of total costs and expected profits, including accidental expenses. This is so that during or after the project, they may be able to anticipate any potential unforeseen monetary challenges.
· Operational Feasibility
Operational feasibility assesses how well a proposed and drawn-up plan fits within the existing business environment. And if developed or modified, will current purchasers still use these services?
Some variables affect the outcome of this analysis such as the amount of technical support, the usefulness of the proposed plan to the company, and customer satisfaction with the current system.
· Legal Feasibility
Before beginning a project, it must be ascertained that all legal aspects of the proposed project and the extent to which the company's policy adheres to the legal rules and requirements in that specific geographical area. In short, full legal approvals must be obtained to begin.
· Schedule Feasibility
It is very important to study the expected Schedule for carrying out the work and completing the project. All investors must define and obtain approval for specific timeframes for the business to ensure the success of the proposed plan.
An example of a feasibility study in oil and gas:
A real-world example of a feasibility study in oil and gas is India's Jicarilla Apache Reservation, which covers more than 850,000 acres of land in north-central New Mexico. This reserve belongs to the Jicarilla Apache National Company, which is one of the largest mineral companies in the San Juan Basin.
This reserve includes nearly 200,000 acres that are currently off-limits to oil and gas development to preserve the environmental integrity of the land. However, this area also contains a very valuable hydrocarbon reservoir underground.
Since most of the nation's revenues result from financial modeling aspects of the oil and gas industry, the company is keen in its study of the reserve to fully understand the potential of hydrocarbon reserves in the land because of its important role in achieving its financial stability and future growth.
The reserve management signed an agreement with RETTEW Company to conduct a feasibility study in oil and gas in the region and evaluate the project to see the possibility of starting gas and oil production in this very sensitive area for investment in this field. Where the RETTEW management met with the tribal departments and the local council and began to study all aspects and challenges of oil & gas and environmental challenges before launching the project.
Here are 5 of the most important oil and gas challenges to consider when doing business in the oil and gas industry:
1- Reduce Production Costs
Let's start with the first challenge of oil and gas: cost reduction. Which is one of the main challenges facing companies operating in the oil sector.
To keep your company competitive, reducing the costs of producing raw resources and derivatives extracted from them to the lowest possible value is necessary. Many oil and gas companies have adopted cost reduction as an important strategy in their workflow. With the global economic recession and the constant fluctuations in oil prices, this strategy has become a safety factor for companies and a proper step to ensure the company's progress and development. This strategy enables companies to achieve the planned production quantities at a lower cost. Over time, equipment will inevitably become less efficient, less reliable, and more prone to errors or breakdowns. This leads to higher production costs. However, companies can avoid this by upgrading critical equipment and systems. For example:
Measurement Equipment
You will have more reliable readings and fewer errors by upgrading measurement equipment. Which leads to higher revenues.
Safety Systems
Continuous updating of safety systems helps in reducing accidents and keeping production going.
Pressure Systems
Upgrades to pressure systems will help your operation run more efficiently. This contributes to higher production and better revenue.
Radar Equipment
Having the best radar technology will give a better visualization of the operations. This helps avoid spills and track the progress of the production process from oil extraction to shipping.
Above all, the company sought to document current operational conditions, identify natural resources, conduct a detailed analysis of reservoirs and wells, evaluate potential water sources, develop several production scenarios and strategies and resource protection guidelines, and prepare a matrix outlining options for development of the land.
Ultimately, the company decided to start producing oil using horizontal drilling and hydraulic fracturing, so they could access oil and natural gas reserves underneath sensitive resource areas. This approach will allow natural resources to be successfully protected while still generating revenue through oil and gas extraction to Shipping.
Improve Company Performance
The improvement and development of the company's performance are one of the most critical challenges of oil and gas. Often companies need to search for innovative solutions to achieve their productivity and goals more than ever before.
To preserve oil and gas reserves, each company seeks to extend the life of the invested sites and find new sites for investment to achieve its goals and aspirations.
What helps improve the company's performance is the modernization of the leading equipment and systems mentioned in the above item. Highly reliable systems mean fewer production shutdowns due to errors, accidents, or other conditions. Ultimately, these will lead to better data collection, higher production rates, and reduced financial losses resulting from downtime, reflecting positively on and improving the company's overall performance.
3- Asset Protection
Security concerns have always been one of the biggest oil and gas challenges companies face, especially if the projects are in conflict zones or areas of war and turmoil.
We note that the economic value of oil resources makes it one of the main targets for terrorism, theft, and piracy, significantly increasing the damage to companies. For example, in 2016, when some terrorist attacks targeted oil transportation lines in Nigeria, which resulted in a decrease in the level of production by about 36%.
In addition to security threats or health impacts, in 2020, when the COVID-19 virus swept the world, most companies reduced their workforce and even evacuated their locations in some cases. At that time, the assets were more at risk.
4- Maintaining The Safety of Employees
The oil and gas industry is one of the most dangerous industries for employees, both in the field of work and in kidnapping incidents. We see this clearly in developing countries that suffer from wars and turmoil, such as Africa, Latin America, Asia, and the Middle East.
It is worth noting that the kidnappers usually target the oil institutions because they are vibrant facilities for theft. However, the matter is not limited to the motive of money, as some groups follow this method as a form of propaganda or to convey a political message.
5- Improve The Environmental Footprint
The last challenge of oil and gas, and the most important and subject to constant discussion, is the need to improve the environmental footprint and work on decarbonization. We all know that extractive industries, particularly oil, cause severe environmental damage.
It is worth noting that the oil and gas industry is one of the most significant contributors to greenhouse gases (methane) and climate change. The closure resulting from the spread of COVID-19 raised awareness of the environmental crisis globally - as a result of the decrease in emissions and pollution by good values during that period.
However, the changing weather patterns resulting from climate change directly affect operations. Likewise, natural disasters such as floods and earthquakes affect the progress of production processes.
This industry is full of strict controls and regulations on the issue of the environment. The existence of strict environmental standards makes your company rethink extraction, production, and distribution methods. You can maintain the oil and gas company’s license to continue operating.
INTRODUCTION TO REFINERIES:
The first element of the petroleum value chain is the extraction of crude oil. An oil refinery is an industrial plant that processes crude oil to produce diesel, gasoline, and other energy and non-energy products. A simplified depiction of the refining process is depicted below.
PETROLEUM MARKET IN PAKISTAN
1.1. Oil Refineries in Pakistan
Currently, five organizations are operating in the oil refining sector in Pakistan: Pak-Arab Refinery Limited (PARCO), Attack Refinery Limited (ARL), National Refinery Limited (NRL), Pakistan Refinery Limited (PRL), and Energic Pk Limited (CPL). All of the refineries except PARCO are based on old, hydro skimming, technology. PARCO is a mild-conversion refinery and even that is now more than 20 years old. The product slate of all the existing local refineries typically comprises Naphtha, Motor Gasoline (MS), High-Speed Diesel (HSD), Furnace Oil (FO), Kerosene, Jet fuel (JP-1 & JP-8), High-Octane Blending Component (HOBC), Liquefied Petroleum Gas (LPG) and Light Diesel Oil (LDO).
.2. Refining Industry and the Petroleum Products’ Production and Consumption in Pakistan Pakistan’s oil refining capacity is about 450,000 barrels per day (bpd), equivalent to 20 million tons per annum. The pertinent details of the refineries are as under:
Refinery | Year | Technology | Capacity (bpd) | Capacity (MT) |
PARCO | 2000 2010 (Euro II) 2011 (AABU) 2020 (upgrade) |
Mild Conversion |
120,000 |
5.5 |
ARL | 1922(original) 1981(new) 1999(upgrade) 2016(upgrade / capacity enhanced) |
Hydro skimming |
53,400 |
2.4 |
NRL | 1966(lube) 1977 (fuel) 2017 & 2018 (upgrade & revamp) 2021 (capacity enhanced) |
Lube Refinery + Hydro skimming |
70,000 |
3.2 |
PRL | 1962 2015(upgrade) | Hydro skimming | 50,000 | 2.3 |
CPL I | 2004 (commissioned) 2008 (revamp/capacity enhanced) |
Hydro skimming |
36,000 |
1.6 |
CPL II | 2015 (commissioned) 2017 (Upgrade Isomerization) |
Hydro skimming |
120,000 |
5.5 |
Total Capacity |
|
|
450,000 |
20.5 |
Compared to the 20 million tons of refining capacity, the actual capacity utilization is at around 10 million tons. This is mainly due to the decreasing FO demand in the country as a result of a change in the energy mix in the power sector. It may be noted that in essence the production slate for refineries is fixed. i.e., they cannot produce just MS or HSD, all products are produced simultaneously. Thus, as FO demand
Declines, refineries have to lower their overall production and struggle to maintain their throughput at optimal levels.
Historically, local refineries have supplied about 45% of the country’s requirements of HSD, 30% of MS, and more than 100% of Jet fuel for defense. The rest of the demand is supplied through imported refined products.
Name of Product | Production (tons/annum) | % of Country Requirements |
Jet Fuels/Kerosene | 0.7 million | More than 100% |
HSD | 4.0 million | 45% |
Motor Gasoline | 2.5 million | 30% |
As per the forecast by an international consultant, Pakistan’s demand for MS and HSD is expected to reach 33 million tons per annum (meta) by 2035.
Mogas Demand & Supply (Million Tons Per Annum)
Diesel Demand & Supply (Million Tons Per Annum)
Challenges in the Current Refining Sector of Pakistan
Lack of Investment in the Refining Sector
There are a multitude of reasons for the lack of investment in Pakistan’s refining sector, as summarized below: lack of investment in the refinery sector not only puts an additional burden on the foreign exchange reserves but also creates a significant dependency on imports. The subsequent section highlights one of the major, controllable, reasons for lack of investment in the sector. i.e., declining tariff protection for refineries.
History of Pricing Policies in Pakistan:The provision of tariff protection to local industry is a global practice, acceptable under the rules of the World Trade Organization (WTO). However, in Pakistan, the tariff protection provided to local refineries has been declining over the years and is currently available only for HSD, which is ~30% of the total production. Thus, the refineries effectively receive less than 2% in tariff protection.
While further details on the tariff protection available to local industries are provided in a subsequent section of this document, the salient points are depicted below:
Diminishing return in Pricing Mechanism for Refineries
The objective of this Policy is to optimize tariff protection with a view to sustainability and upgradation of the refining sector.
Existing Policy is outdated:
The importance of local refineries and their contribution to economic growth is clear. In October 1997, the Government of Pakistan (GOP) issued the Petroleum Policy 1997 which provided various policy incentives, including the refinery pricing formula. Later in 2007 and 2018, further incentives were also provided but they could not attract investment in the sector. Since then, the required attention to the sector remained lacking and no policy updates were made.
While global oil refining technology evolved, there was a policy vacuum in Pakistan that should have addressed the latest developments in the refining industry. Given the above challenges and lack of policy alignment with the international market, the refineries are now at risk of closure.
Impact of closing local refineries:
The shutdown of refineries in the country will have serious ramifications and can lead to a national crisis. The ramifications could include:
· 7 energy products (Petrol, Diesel, JP-1, JP-8, Kerosene, Furnace Oil, LPG), as well as multiple non-energy products (lubes, bitumen, wax, etc.), would need to be imported instead of importing only crude oil.
· Based on current demand, ~20 million tons/year of products will need to be imported and 3.5 million tons/year of local crude/condensate will need to be exported. Forecasted product imports by 2035 will be ~46 million tons/year.
· 60%-65% of local crude production would have to be transported to Karachi from the upcountry for export, and more than 70% of imported finished products would have to be transported from Karachi to the upcountry, requiring significant infrastructure enhancement and entailing huge transportation costs.
· The above-mentioned import/export/transport requirements will significantly increase port congestion, demurrage costs, storage constraints, and operational complexities, and put the entire energy supply chain at risk
· Negative impact on the economy, such as employment, taxes, import bill, GDP, etc.
· Compromised national energy security; unsustainable supply in geo-political situations
· There will be a loss to the country as a result of
· Exporting crude oil/condensate at a lower realizable price than the local market.
· Import value-added (finished) products instead of raw materials (crude oil)
· The country’s economy requires sustained provision of energy. Refineries bring that stability to the supply chain. The energy supply chain may be disrupted as a result of the closure of crude oil fields with associated gas, potentially resulting in a gas shortage.
Ultimately a deregulated environment is the need of the day. However, without upgrading existing refineries, complete deregulation will result in a shutdown of the existing refineries, which will be detrimental to the overall economic interest of Pakistan, as highlighted above.
Importance of Incentives to Local Refining Industry:
A modern refining sector will not only boost the development of allied and downstream sectors of the economy, but it will also lead to industrial development, which is critical for economic growth. Furthermore, modernization also benefits the end consumer, along with all the stakeholders, as productivity is optimized and economic activity in nearby areas increases.
The refining sector needs multi-billion-dollar investments for the development of new deep conversion refineries, petrochemical complexes, and the upgradation of existing refineries. These developments and upgrades are needed to reduce the current heavy dependence on imported finished products, and consequently positively impact the country's precious foreign exchange requirements. This, along with the requisite development of pipelines and storage across the country, will provide the necessary energy security to the country.
The refining sector thus requires support from the Government to continue operating viably and to contribute effectively to economic growth, both through the induction of new refineries and the upgradation of old ones. Such a long-term Policy, and its effective implementation, are needed to attract the capital investment required for long-term sustainable development of the refining sector.
The Ministry of Energy (Petroleum Division), with inputs from local refineries, has been engaged in the development of a policy package for the sustainability and upgradation of existing refineries as well as attracting investments in refining/petrochemical/oil import terminals and associated infrastructure.
POLICY OBJECTIVES
The objectives of the Refining Policy are to provide the enabling environment for the long-term sustainability of the existing refineries and to attract foreign investment in new refinery projects. While there will be a separate Policy for new refinery investments, this Policy covers the existing refineries and has the following objectives:
1.3. Achieve energy security through a gradual increase in self-reliance in the petroleum refining capacity of the country, and reduce dependence on imports of refined products by incentivizing investment in the upgradation and modernization of existing refineries;
1.4. Provide an enabling environment for attracting significant investments in a highly capital-intensive industry;
1.5. Enforce production & marketing of high-quality and environmentally friendly fuels to end consumers at competitive prices;
Provide tariff protection to local refineries for their sustainability; to enable a business case for their upgradation to produce Euro-V fuels and maximize production of Motor Gasoline and Diesel by minimizing production of High Sulphur Furnace Oil.
POLICY STRUCTURE:
Policy Structure for Upgradation/Modernization/Expansion of Existing Refineries
All existing refineries are encouraged to upgrade/modernize/expand (Upgrade Project) their refineries to produce environmentally friendly fuels as per Euro-V specifications and to maximize the production of Motor Gasoline and Diesel by minimizing furnace oil (FO)/ other fuels. The refineries that commit to Upgrade shall be entitled to incentives under this Policy. The selection of equipment, technology, or process will be on a project-to-project basis by the concerned refineries. The refineries have planned to make the following improvements in product quality, quantity, and product mix through up-gradation:
Refinery | Current Capacity (tons/day) | POST UPGRADE Capacity (tons/day) | ||||||
| Specs (mogas/diesel) | MOGAS | Diesel | FO | Specs (mogas/diesel) | MOGAS | Diesel | FO |
PARCO | Euro-III/III | 3,678 | 5,600 | 3,290 | Euro-V/V | 5,493 | 8,082 | 212 |
ARL | Euro-V/III | 1,923 | 2,071 | 1,024 | Euro-V/V | 2,379 | 2,008 | 908 |
PRL | Euro-V/- | 783 | 1,793 | 1,350 | Euro-V/V | 4,854 | 6,111 | 167 |
NRL | Euro-V/V | 818 | 3,273 | 2,253 | Euro-V/V | 2,025 | 4,087 | 1,127 |
CPL | Euro-V/- | 3,500 | 8,500 | 7,500 | Euro-V/V | 6,500 | 11,000 | 1,000 |
*All numbers are based on detailed feasibility studies and may change after the completion of the Front-End Engineering Design (FEED). Current production by refineries that are Euro V compliant is in terms of Sulphur content only.
DEFINITIONS:
1. “Cure Period” means the period granted to the refinery by OGRA to remedy the refinery’s lapse on committed milestone.
2. “Deep Conversion Refineries” means Those equipped with a cracking facility, wherein furnace oil is converted/minimized to produce more Petrol and Diesel.
3. “Deregulation” refers to a pricing regime in which refineries are free to set their prices on a market-competitive basis.
4. “Environment” means the Environment as defined under the Pakistan Environmental Protection Act, 1997 (XXXIV of 1997)
5. “Ex-Refinery Price” means the price at which Refineries offer Petroleum Products to their customers at the refinery gate, based on the pricing mechanism, as approved by the government from time to time.
6. “Existing refinery/ Brownfield Refinery” means existing refineries already operating under a license issued by OGRA.
7. “External Auditor” means the external audit firm amongst one of the audit firms namely PricewaterhouseCoopers, Deloitte, KPMG, and Ernest & Young.
8. “Joint Escrow Account” as mentioned in Section 6 of this Policy.
9. “Financial Close” shall mean the date when all financing agreements have been executed and the refineries have made the final investment decision for their upgrade project.
10. “Fiscal Incentive” bears the meaning as mentioned in Section 6 of the Policy.
11. “Government Bodies” means any national agency, authority, department, inspectorate, ministry, court, or tribunal, either public or statutory.
12. “Hydro Skimming Refinery” means the refinery equipped with atmospheric distillation, naphtha reforming, and necessary treating processes.
13. “IFEM” means Inland Freight Equalization Margin duly worked out by OGRA for keeping uniform prices across the country under relevant Rules and policy guidelines issued by the Federal Government from time to time.
14. “License” means a license granted under the Oil and Gas Regulatory Authority Ordinance, 2002 (XVII of 2002) and the rules made thereunder.
15. “MEPD” means Ministry of Energy (Petroleum Division)
16. “Mild Conversion Refinery” means a refinery equipped with atmospheric and vacuum distillation, naphtha reforming, and vacuum gas oil mild hydrocracker. Greenfield Refinery” means a brand-new deep conversion refinery whose selection of equipment, technology, and process must be that of a deep conversion refinery that maximizes the production of white products including Diesel & Motor Gasoline by minimizing or eliminating the production of Furnace Oil.
18. “OGRA” means Oil and Gas Regulatory Authority as defined under the Oil and Gas Regulatory Authority Ordinance, 2002 (XVII of 2002)
19. “Incremental Incentive” means as defined in clause 6.1.2.2 of this Policy.
20. “Oil Marketing Company” means the Oil Marketing Company as defined under the Oil and Gas Regulatory Authority Ordinance, 2002 (XVII of 2002) and the rules made thereunder.
21. “Ordinance” means the Oil and Gas Regulatory Authority Ordinance, 2002 (XVII of 2002)
22. “Petroleum Products” means the petroleum products specified under Schedule-III of Pakistan Oil (Refining, Blending, Transportation, Storage and Marketing) Rules, 2016.
23. “Platts” means daily market Price Report of crude oil and related petroleum products traded in different markets including the Arab Gulf energy market, presently published by S&P Global.
24. “Policy” means Pakistan Oil Refining Policy 2023 for the upgradation of Existing Refineries, already operating under a license issued by OGRA.
25. “Pricing Mechanism” means the prevailing pricing mechanism for the regulated and semi-regulated petroleum products as defined by the Federal Government at the time of promulgation of this policy with subsequent amendments by the government from time to time for the fixation of ex-refinery or ex-depot sales price. The OMCs and Refineries determine the prices of fully deregulated petroleum products on their own under market forces.
26. “Product Slate” means petroleum products being produced by the respective refinery.
27. “Refinery” means the Refinery as defined under the Oil and Gas Regulatory Authority Ordinance, 2002 (XVII of 2002) and the rules made thereunder.
28. “Refining” as defined under Pakistan Oil (Refining, Blending, Transportation, Storage, and Marketing) Rules, 2016.
29. “Rules” means the Pakistan Oil (Refining, Blending, Transportation, Storage and Marketing) Rules, 2016 as well as Petroleum Products (Petroleum Levy) Rules, 1967 Rules framed under Petroleum Products (Petroleum Levy) Ordinance, 1961.
30. “SBP” means The State Bank of Pakistan as defined under The State Bank of Pakistan Act, 1956 (XXXIII of 1956)
31. “Specifications” as defined under Pakistan Oil (Refining, Blending, Transportation, Storage, and Marketing) Rules, 2016, and notified by MEPD occasionally.
32. “Storage” as defined under Pakistan Oil (Refining, Blending, Transportation, Storage, and Marketing) Rules, 2016.
33. “Substandard petroleum product” as defined under Pakistan Oil (Refining, Blending, Transportation, Storage and Marketing) Rules, 2016.
34. “Tariff Protection”: The applicable custom duty duly charged by the Customs authority at the import stage on petroleum products which local refineries are allowed to apply and retain in the ex-refinery prices of petroleum products for the sustainability (7.5% on HSD) and up-gradation of refineries (2.5% on HSD and 10% on MS) as mentioned in section 6.1.2 of this Policy.
35. “Technical Standards” as defined under Pakistan Oil (Refining, Blending, Transportation, Storage, and Marketing) Rules, 2016.
36. “Upgrade Project” means projects to upgrade/modernize/expand the existing refineries to produce environment-friendly fuels of minimum Specifications to be notified by the Petroleum Division, maximize production of Motor Gasoline (Petrol) and Diesel, and reduce Furnace Oil.
37. “Upgrade Agreement” means as defined in clause 6.1.3.1
38. “Waiver” as referred to in clause 6.1.3.5 of the Policy.
All other words and expressions used but not defined in this policy shall have the same meanings as those in the Oil and Gas Regulatory Authority Ordinance, 2002 (XVII of 2002) and rules made thereunder.
Attock Petroleum Limited
Attock Petroleum Limited (APL) (Urdu: اٹک پیٹرولیم) is a Pakistani oil marketing company which is a subsidiary of the UK-domiciled company Attock Oil Company. It is based in Rawalpindi, Pakistan.
History
Attock Petroleum started operations in 1998 and is Pakistan's third-largest oil marketing company as of 2018
In 2005, Attock was listed on the Karachi Stock Exchange, following an initial public offering at a strike price of PKR 57.75
It has filling stations in the Federal Capital Territory, Khyber Pakhtunkhwa, Kashmir, Gilgit Baltistan, Balochistan, Punjab, and Sindh. It also provides CNG at selected stations. Other facilities include a tire shop, mosques, and resting areas.
The company also opened two filling stations in Jalalabad, making it the first Pakistani oil marketing company in Afghanistan
Products
· Furnace oil
· High-speed diesel oil
· Light-speed diesel oil
· Premier motor gasoline
· Kerosene oil
· Road paving asphalt
· Lubricants
Company Type | |
Industry | |
Founded | 1998; 26 years ago |
Founder | |
Headquarters | |
Products | Lubricants, LPG, CNG |
Revenue |
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Owner | Pharaon Investment Group Limited (34.48%) |
Number of employees | 451 (2023) |
Website |
Registered Office:
Attock House, Morgah, Rawalpindi
+92 51 5127250-54
+92 51 5127255
Attock Refinery Ltd.
Company Type | |
Industry | |
Founded | 1922; 102 years ago |
Headquarters | Rawalpindi, Punjab, Pakistan |
Area served | Pakistan |
Key people | · Adil Khattak (CEO) · Shuaib A. Malik (Chairman) |
Revenue |
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Owner | Attock Oil Company (61.06%) |
Number of employees | 829 (2023) |
Attock Gen Limited (30%) | |
Website | |
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Products
· Liquefied petroleum gas (LPG)
· Unleaded premium motor gasoline
· Mineral turpentine
· Kerosene oil
· High-speed diesel
· Jet petroleum
· Petroleum solvents
· Light diesel oil
· Furnace fuel oil
· Paving grade asphalts
Subsidiary:
National Refinery Limited (25%)
Contact Us :
92-51-5487041- 45
92-51-5487093-4
info@arl.com.pk
Cnergyico Pk Limited
Cnergyico Pk Limited, formerly Byco Petroleum Pakistan Limited and Bosicor Pakistan Limited, is a Pakistani petroleum refinery based in Karachi.[4] It is a subsidiary of the Mauritian company Cnergyico Industries Incorporated.
Cnergyico operates the largest oil refinery based in Hub, Balochistan, a network of petrol pumps, and a crude oil terminal, single point mooring.
Formerly | Bosicor Pakistan Limited |
Company Type | |
Industry | |
Founded | 1995; 29 years ago |
Founder | Parvez Abbasi[1] |
Headquarters | Karachi, Pakistan |
Area served | |
Key people | Uzma Abbassciy (chairperson)[2] |
Products | |
Revenue |
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Number of employees | 725 (2023) |
Cnergyico Industries Incorporated | |
Website | |
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Cnergyico Pk Limited
9th,10th Floor, The Harbour Front, Dolmen City,
HC-3, Block-4, Marine Drive, Clifton,
Karachi-75600, Pakistan.
Hascol Petroleum Ltd.
Hascol Petroleum Limited (Urdu: حیسکول پیٹرولیم) is a Pakistani oil marketing company which is active in the downstream sector. It is based in Karachi, Pakistan.
The company has distribution rights for German lubricating oil Fuchs in Pakistan.
Company Type | |
Industry | |
Founded | 2001; 23 years ago |
Founder | Mumtaz Hassan Khan |
Headquarters | |
Key people | · Sir James Carter Alan Duncan (Chairman) · Aqeel Ahmed Khan (CEO) |
Products | Oil |
Revenue |
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Website |
Registered office
Office #29, 29th floor Sky Towers – West Wing (A)
Dolmen City, Abdul Sattar Edhi Avenue, Block-4, Clifton, Karachi
Tel: +92 (21) 111-757-757
Mari Petroleum Company Limited
Mari Petroleum Company Limited (MPCL) (Urdu: مری پیٹرولیم) is a Pakistani petroleum exploration and production company based in Islamabad, Pakistan. The company is controlled by the Fauji Foundation with 40 percent shares.
It is operating the country’s second-largest gas reservoir at Mari Field, District Ghotki, Sindh. MPCL is primarily engaged in the exploration, development, and production of hydrocarbon products (natural gas, crude oil, condensate, and liquefied petroleum gas).
It is listed and traded on the Pakistan Stock Exchange.
Company Type | Public |
Industry | Oil and Gas |
Founded | 1984; 40 years ago |
Headquarters | Islamabad, Pakistan |
Key people | · Waqar Ahmed Malik (Chairman) · Faheem Haider (CEO) |
Products | Oil, Natural gas, Condensate, Liquefied Petroleum Gas |
Revenue |
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Owner | · Fauji Foundation (40%) · GoP (20%) · OGDCL (20%) |
Number of employees | 1,618 (2023) |
Website | |
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CONTACT US:
21, Mauve Area, 3rd Road,G-10/4, Islamabad, Pakistan
+92-51111410410,
+92-518020200
+92-51-2352859
National Refinery Limited
National Refinery Limited (NRL) (Urdu: نیشنل ریفائنری لمیٹڈ) is a Pakistani oil refinery which is a subsidiary of UK-domiciled Attock Oil Company. It is based in Korangi Creek, Karachi.
It is a petroleum refinery and petrochemical complex engaged in the manufacture and sale of asphalts, BTX, fuel products, and lubes for domestic consumption and export. National Refinery Limited is the second largest capacity refinery in Pakistan in terms of crude oil processing facilities and is the only lube oil refinery in Pakistan.
Company Type | |
Industry | |
Founded | 1963; 61 years ago |
Headquarters | Karachi, Pakistan |
Area served | Pakistan |
Key people | Jamil A. Khan (CEO) |
Products | Motor gasoline, kerosene, high-speed diesel, jet fuel, and LPG |
Revenue |
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Owner | · Attock Refinery Limited (25%) · Pakistan Oilfields Limited (25%) · Islamic Development Bank (15%) |
Number of employees | 971 (2023) |
Website |
Registered Office:
7 B, Korangi Industrial Area, Karachi -74900
UAN : 92-21-35064981-85
Email: info@nrlpak.com
Oil and Gas Development Corporation
Oil & Gas Development Company Limited, commonly known as OGDCL (Urdu: آئل اینڈ گیس ڈویلپمنٹ کمپنی) is a Pakistani state-owned oil and gas company headquartered in Islamabad. It has a primary listing on the Pakistan Stock Exchange and a secondary listing on the London Stock Exchange. The rest are held by private investors. For the financial year 2022, it reported net sales of Rs 335.46 billion and profit of Rs 133.78 billion.
It is the largest company in Pakistan in terms of market capitalization and has repeatedly ranked among the Forbes Global 2000.
Headquarters of the Oil & Gas Development Company in Islamabad | |
Native name | آئل اینڈ گیس ڈویلپمنٹ کمپنی |
Company Type | Public Company |
Industry | |
Founded | 4 April 1961 |
Headquarters | Islamabad, Pakistan |
Area served | Pakistan |
Key people | Ahmed Hayat Lak (CEO) |
Products | Fuels, Natural gas |
Revenue |
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Owner | Government of Pakistan (85.02%) |
Number of employees | 11,207 (2023) |
Pakistan Minerals Limited (33.33%) | |
Website | |
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Head Office :
Plot No. 3, Jinnah Avenue, Blue Area
Islamabad,
Phone: 92519209811-8
Email: info@ogdcl.com
Pak Arab Refinery Company Ltd.
Pak-Arab Refinery Company Limited (PARCO) (Urdu: پاک عرب ریفائنری) is a Pakistani joint venture oil and gas company active in refining, transporting and marketing petroleum products. It is a joint venture between the governments of Pakistan and Abu Dhabi.
Company Type | |
Industry | |
Founded | 1974 |
Headquarters | Karachi-75190, Pakistan |
Key people | Irteza Ali Qureshi (managing director) |
Products | Oil, high-speed diesel, kerosene oil, and petroleum distillates |
Revenue |
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Owner | Government of Pakistan (60%) |
Total Parco | |
Website | |
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Contact Us:
Pak-Arab Refinery Limited
Corporate Headquarters
Korangi Creek Road
Karachi-75190
Pakistan
UAN: (021) 111-392-567
Pakistan Oilfields Limited
The Pakistan Oilfields Limited (Urdu: پاکستان آئل فیلڈز) is a Pakistani oil and gas exploration company which is a subsidiary of UK-domiciled Attock Oil Company. It is based in Rawalpindi, Punjab Province, Pakistan.
In 1978, Pakistan Oilfields took over the exploration and production business of Attock Oil Company. Since then, it has been investing independently. Pakistan Oilfields is a leading oil and gas exploration and production company listed on the Pakistan Stock Exchange.
Company Type | Public |
Industry | |
Founded | |
Headquarters | Rawalpindi, Pakistan |
Area served | Pakistan |
Key people | Shoaib A. Malik (Chairman and CEO) |
Revenue |
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Owner | Attock Oil Company (52.77%) |
Number of employees | 687[1] (2023) |
Website |
Head Office:
POL House, Morgah,
Rawalpindi, Pakistan
Phone: (92) 51 5487589-96
Fax: (92) 51 5487598-99
Email: polcms@pakoil.com.pk
Pakistan Petroleum Ltd.
Pakistan Petroleum Limited (PPL) (Urdu: پاکستان پیٹرولیم) is a Pakistani state-owned petroleum company headquartered in Karachi. It operates major oil and gas fields, including the Sui gas field, has non-operating interests in other fields, and is interested in an exploration portfolio onshore and offshore. Its managing director reports to the Petroleum Secretary of Pakistan.
Company Type | |
Industry | Energy |
Genre | |
Founded | 5 June 1950; 74 years ago |
Headquarters | , Pakistan |
Area served | Nationwide |
Key people | · Imran Abbasy (CEO) · Shahab Rizvi (Chairman) |
Products | |
Revenue |
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Owner | Government of Pakistan (67.51%) |
Number of employees | 2,594 (2023) |
· Bolan Mining Enterprise · PPL Europe E&P Limited · PPL Asia E&P B.V. · Pakistan Petroleum Provident Fund | |
Website | |
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Registered Office
Pakistan Petroleum Limited 4th Floor, PIDC House
Dr. Ziauddin Ahmed Road
P. O. Box 3942
Karachi 75530
UAN: +92-21-111-568-568
Tel. Nos: +92-21-35651480-89
Fax Nos: +92-21-35680005 +92-21-35682125
Khyber Pakhtunkhwa Oil & Gas Company Limited
KPOGCL
Khyber Pakhtunkhwa Oil & Gas Company Limited, commonly known as KPOGCL, is a provincial oil and gas holding company based in Peshawar, Pakistan. It was established by the Government of Khyber Pakhtunkhwa in 2013. KPOGCL is a member of the Pakistan Petroleum Exploration and Production Companies Association. Nasir Khan is the company's Acting chief executive officer.
The company owns exploration and production rights for about 10 trillion cubic feet (280 billion cubic meters) of natural gas and 600 million barrels (95 million cubic meters) of petroleum resources in Khyber Pakhtunkhwa. In January 2016, the Federal Government of Pakistan allowed KPOGCL for the first time in the country's history to sell seepage crude oil. The company may supply up to 23 barrels per day (3.7 m3/d) to Attock Refinery.
In 2015, the company signed a memorandum of understanding with Russian exploration company Osteologic on joint exploration and production activities.
In addition to its activities, the company provides services to other oil and gas companies in seismic data acquisition, geological and geophysical surveys, logistic support, and security arrangements.
Industry | |
Founded | 2013 |
Headquarters | Pakistan |
Key people | Nasir Khan (CEO) |
Owner | |
Website | |
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Contact Us
3rd Floor, Ali Tower, University Road
(Opposite Custom House),
Peshawar, Pakistan
Tel: +92 91-9216283, 9216029
Fax: +92 91-9216295
Email: info@kpogcl.com.pk
Pakistan Refinery Limited |
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The Soviet Union in the early 1960s offered to assist Pakistan in constructing an oil refinery, with the condition that the facility would exclusively process oil imported from the Soviet Union. In response, the Government of Pakistan approached private sector companies operating in the country, including Shell Pakistan and Esso, proposing a joint venture to build a refinery in Karachi. The private companies, seeking to protect their profits from oil imports, agreed to the government's proposal as an alternative to accepting the Soviet offer.[6] The resulting complex, named Pakistani Oil Refinery, commenced operations in 1964. It was inaugurated by Muhammad Ayub Khan, then President of Pakistan. The design capacity of the refinery was 1 million tons of crude oil per annum but was increased to 2.1 million tons per annum later.
Products
Pakistan Refinery refines and sells petroleum products. It has a capacity of refining 47,000 barrels per day of crude oil into a range of petroleum products. The refinery produces high-speed diesel, furnace oil, motor spirit, Naphtha, kerosene, jet fuels, and liquified petroleum gas. All the products are sold locally except for naphtha which is exported. Using its distribution network at Keamari, the finished products are supplied by the company to oil marketing companies of Pakistan – Shell Pakistan, Pakistan State Oil, and Total Parco.
Company Type | ||
Industry | ||
Founded | 1960; 64 years ago in Karachi, Pakistan | |
Headquarters | Karachi, Pakistan | |
Area served | ||
Key people | Zahid Mir (CEO) in 2019 | |
Revenue |
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Owner | Pakistan State Oil (63.56%) | |
Number of employees | 284 (2023) | |
Pak Grease Manufacturing Company Limited (27.26%) | ||
Website | ||
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P.O.Box 4612,
Karachi - 74900
E-mail info@prl.com.pk
Telephone:
(92-21) - 3512-2131-40
Fax:
(92-21) - 35091780
Pakistan State Oil (PSO)
Pakistan State Oil (Urdu: پاکستان ریاستی تیل) is a Pakistani petroleum corporation involved in marketing and distribution of petroleum products. It has a network of 3,689 petroleum filling stations, out of which 3500 outlets serve the public retail sector and 189 outlets serve wholesale bulk customers. Pakistan State Oil is Pakistan's largest fuel marketing company.
Headquarters of the Pakistan State Oil in Karachi | |
Native name | پاکستان ریاستی تیل |
Company Type | |
Industry | |
Predecessor | · National Oil · Dawood Petroleum Limited · Premier Oil Company Limited · State Oil Company Limited |
Founded | 1 January 1974; |
Headquarters | , |
Area served | Pakistan |
Key people | · Asif Baigmohamed (Chairman) · Syed Muhammad Taha (CEO) |
Products | Motor gasoline (Mogas), high-speed Diesel (HSD), furnace oil (FO), jet fuel (JP-1), kerosene oil, Compressed natural gas (CNG), petrochemicals and lubricants |
Revenue |
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Number of employees | 2,222[2] (2023) |
Government of Pakistan (22.47%)[3] | |
· PSO Venture Capital · PSO Renewable Energy · Carisma · Pakistan Refinery Limited (63.56%) · Asia Petroleum Limited (49%) · Pak-Grease Co. Limited (22%) | |
Website | |
PSO House
Khayaban-e-Iqbal, Clifton, Karachi 75600,
Tel: (92 21) 99203866-85
Fax: (92 21) 99203835
Ta'aluq Careline: 0800-03000
Email: Taaluq@psopk.com
Fuel Prices as off today ( after every 15 days all prices change in Pakistan )
Karachi
Rs/LITRE
Rs.255.88/Ltr
Rs.248.38/Ltr
Rs.255.14/Ltr
LPG (Liquid Petroleum Gas) Rs.254/KG
Sui Northern Gas Pipelines Limited
Sui Northern Gas Pipeline Limited (Urdu: سوئی ناردرن گیس پائپ لائن لمیٹڈ) was incorporated as a private limited company in 1963 and later converted into a public limited company in January 1964 under the Indian Companies Act 1913 of British India, now The Companies Act 2017 of Pakistan. It is listed on the Pakistan Stock Exchange.
Company Type | |
Industry | |
Founded | 1963 |
Headquarters | Head Office in Lahore, Pakistan |
Area served | Punjab, Khyber Pakhtunkhwa, Azad Kashmir & Islamabad |
Key people | Amer Tufail (CEO) |
Products | Natural Gas Transmission & Distribution |
Revenue |
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Number of employees | 8,488[1] (2022) |
Website | |
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Puma Energy
Puma Energy Pakistan, formerly known as Admore Gas, is a Pakistani oil marketing company based in Karachi. It operates more than 470 petrol pumps in the country.
Puma Energy Pakistan is owned by Pakistani senator, Aamir Chishti.
Puma Energy Pakistan was founded as Admore Gas in 2001.
In 2014, Admore Gas was acquired by Chisti Group.
In 2017, Puma Energy acquired a majority stake in Admore Gas. As a result, it was renamed as Puma Energy Pakistan.
In 2022, Cnergyico Pk Ltd announced its intention to acquire a 57.37 percent stake in Puma Energy Pakistan.
Formerly | Admore Gas |
Company Type | Private |
Industry | |
Founded | 2001; 23 years ago |
Headquarters | |
Area served | Pakistan |
Products | Petroleum products |
Services | Distribution and retail |
Owner | |
Website |
Contact Us :
92-21-3527700-09
info@pumapakistan.com
9th Floor, Bahria Complex III M.T. Khan Road Karachi
Total Parco Pakistan
Total Parco Pakistan Limited, stylized as TOTAL PARCO, is a Pakistani oil marketing company that is a subsidiary of French company Total S.A. It is based in Lahore, Pakistan.
Total Parco is Pakistan's second-largest petrol pump network. It operates more than 800 petrol pumps.
It was founded in 2002 as a joint venture between Pak-Arab Refinery (PARCO) and Total S.A.In 2013, Total announced a plan to acquire 438 petrol stations of Chevron Corporation Pakistan. The acquisition was completed in 2015 and Caltex petrol pumps were renamed Parco Total. In 2024, Gunvor acquired a 50 percent stake in TotalEnergies in Total Parco.
Company Type | Private |
Industry | |
Founded | 2002; 22 years ago |
Headquarters | |
Website |
United Energy Pakistan |
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Headquarters Islamabad Stock Exchange Towers, 19th Floor, Jinnah Ave, Building F 7/1 Blue Area, Islamabad, Islamabad Capital Territory Location
United Energy Pakistan (UEP), formerly known as BP Pakistan, is a subsidiary of Chinese United Energy Group in Pakistan with a footprint in Sindh province of Pakistan, around 100 km to the east of Karachi. United Energy Group had acquired the Pakistani assets from BP in September 2011 and BP Pakistan thus became UEP.[1][2]
The company's assets cover Badin, Tando Muhammad Khan, Tando Allahyar, Thatta, Hyderabad (rural), Matiari, Sanghar, Mirpur Khas, and Khairpur of the Sindh province. Currently, there are active production and exploration blocks in Sindh province and four offshore exploration blocks in the Arabian Sea. The company also won bids for two new exploration blocks, Digri and Sanghar South, which lie adjacent to UEP's Mirpur Khas Khipro concession areas.
In 2012, UEP secured a credit line of $5 billion from China Development Bank for its Pakistani operations and other potential acquisitions.
In March 2018, UEP acquired OMV Pakistan assets for US$192 million.
In FY2019, United Energy Pakistan was the largest foreign oil and gas exploration and production company in Pakistan and remained 9th on the list with exports worth $227 million.
Mausuf Ahmad
Parent organization
United Energy Group Websitehttps://uep.com.pk/
Formerly called
BP Pakistan
Contact Us:
17th Floor, The Sky Tower – East Wing.
Dolmen City, HC 3, Block 4,
Scheme 5, Clifton,
Karachi, Pakistan.
Phone: +92-21-3561-1194, +92-21-3561-1198
Fax: +92-21-3561-0634
Email: gcompliancenethicsforum@uep.com.pk
Wafi Energy Pakistan Limited
Wafi Energy Pakistan Limited, formerly known as Shell Pakistan Limited is a Pakistani oil marketing company based in Karachi. It is a subsidiary of Wafi Energy Holding, a Saudi Arabian oil and gas company.
Formerly | Burmah Shell Oil Distribution Company of Pakistan (1947–1970) |
Company Type | |
Industry | |
Founded | 1947; 77 years ago |
Headquarters | Karachi, Pakistan |
Area served | |
Key people | Waqar Siddiqui (CEO) |
Products | Gasoline, Aviation fuels, Compressed natural gas and lubricants |
Revenue |
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Owner | Wafi Energy Holding (87.78%) |
Wafi Energy Holding | |
Website |
Contact Us:
Shell House, 6 Ch. Khaliquzzaman Road, Karachi-75530.
Tel: +92 (21) 111-888-222
Fax: +92 (21) 3563-0110
