PPL’s exploration programme performing in all blocks

Karachi, July 9, 2012: This is with reference to the report published in a section of press on July 8 conveying the position that Pakistan Petroleum Limited (PPL) is among public sector oil and gas exploration companies having non-performing blocks. The report does not convey the factual position with regard to PPL’s exploration efforts and status of exploration blocks. Detailed below is the accurate position in this regard for the benefit of readers.

PPL confirms it does not have any non-performing blocks in the country. All of PPL’s 19 company-operated blocks are active and in different stages of exploration. Seismic surveys have been completed in 13 blocks, while continuing in five blocks.

Among these, seven blocks are in Balochistan. PPL has been continuously conducting geophysical and other surveys in Balochistan blocks since 2004 and has also drilled one exploration well in Dhadar block. One seismic crew is specifically dedicated to Balochistan, which has been conducting back to back surveys in these blocks. The company has achieved this landmark through sheer commitment overcoming security challenges, extremely rough terrain and remoteness. The company also plans to drill one exploration well in Khuzdar and two exploration wells in Barkhan during 2012- 2013, preparations for which are in advance stages.

In the remaining 12 blocks, which are located in Sindh, Punjab and Khyber Pakhtunkhwa provinces, exploration activities are also progressing at a fast pace. PPL has been operating three seismic crews simultaneously in these blocks since 2010, despite heavy floods in Sindh during 2011 and security concerns in Khyber Pakhtunkhwa Province.

The company has been continuously operating four to five seismic crews since 2010, leading to drilling activity, which is by far the highest number any exploration and production company has managed to operate in Pakistan.

Hence it is clear that none of PPL’s exploration blocks are non-performing despite the severe constraint the company is facing due to about Rs. 50 billion in circular debt payable to it by the relevant sectors.