Mobilisation of rig is not possible, at least during the monsoon season, as it requires at least five days of good weather.
An official of the ministry confirmed to this correspondent that the PPL has abandoned Pasni X-2 after declaring it a dry hole. He also confirmed that the PPL is yet to remove rig from the site of exploration.
He said: "It's not possible to dislodge rig from waters during high tide period and the operator has to wait for clear weather for it but, under the agreement, the joint venture is bound to pay rental as standby charges for the period when it's not functional."
According to the official, petroleum secretary Ahmed Waqar had held a number of meetings with the PPL management and DGPC, wherein, he directed them to control cost of the well to curtail its expenditures, but the end result showed that his instructions made no difference.
A report on joint venture end result, made available to Business Recorder, gives clear understanding that how the operator-PPL handled the project. It talks all about its inefficiency, ill planning and hiring services of non-professional consultants: all these factors contributed to play havoc with the project.
The report mentioned in clear terms that non-professional attitude of the operator increased the cost of drilling to $31 million, which is more than double the cost worked out at the time of launching of the project.
As per original plan, the cost of the well was fixed at $16.7 million.
The report gives complete picture of the consultant's poor capacity. It said in one of the meetings stakeholders questioned the role of consultant in drilling of the well. In its response, the operator conceded that consultants hired for planning of the well were considered good based on their impressive CVs, but practically they were not up to our standards.
According to the report, PPL spudded Pasni X-2 on February 18, 2004 and its completion target was 110 days at the cost of $16 million. But the operator never met the deadline and kept on increasing cost of the project, and after five months the operator announced in July last that Pasni X-2 was a failure and it was going to be abandoned as a dry hole.
The PPL, being the operator, has 70 percent share in Pasni X-2. The remaining 5 percent share goes to Government Holding Pakistan Limited (GHPL) and 25 percent to Mari Gas Company Limited (MGCL).
Sources added the PPL took over the operatorship of Pasni and Offshore Makran Central Blocks from Ocean Energy Pakistan in January 2003 with a commitment to drill one well in either of the two blocks.
Facts established that the PPL's performance was never up to the mark for any of its projects in this area. Its Pasni-1 was a failure and was finally abandoned and Gwadar-1 also met the same fate, which is also confirmed by the report that the PPL drilled two exploration wells - Pasni-1 and Gwadar-1.
Pasni-1 was drilled to a total depth of 3,569 meters but due to drilling problems and sub-surface structural complexities, the well did not reach the potential target of Panjgur sandstone and it was suspended.
Gwadar-1, located west of Pasni-1, was drilled to a total depth of 3,810 meters, in which Panjgur sandstone was also not encountered and the well was plugged and abandoned as dry hole.
Since both wells were drilled on 2D seismic mapping, their failure prompted the joint venture to acquire 3D seismic for Pasni X-2.
The report added that 3D data was acquired during November 2000 to January 2001. Based on the interpretation of 3D seismic data, 13 leads were identified and it was evaluated that Pasni-1 well was not properly located.
It added that to select and firm up a prospect out of identified leads, a Pre-stack Depth Migration from the selected 3D data was carried out by the operator (Ocean Energy).
After taking over the operatorship, all technical data acquired by Ocean was transferred to the PPL by September, 2003 and the PPL re-evaluated all 13 identified leads.
Based on detailed in-house interpretation of leads, Pasni prospect was considered to be most promising/robust and selected for drilling of exploration well.
According to the report, in a TCM/OCM held on February 21, 2004, the joint venture partners unanimously agreed for the drilling of exploration well over Pasni prospect.
The joint venture carried out planning, procured materials and services by January 2005 and spudded well on February 18, 2005 with Ensco Jack-up Rig 95. The well was drilled down to 2,900 meters (MD) in 12 1/4" hole after setting 30" casing at 122.5 meters, 24 1/2" at 307.5 meters, 18.5/8" at 850 meters and 13.5/8 x 14" at 1,650 meters.
Prior to running 9 5/8" casing, Resistively-Sonic-GR-SP, Density-Neutron-GR-CAL and EMS-GR (in two runs), wire-line logs were recorded in range of 2,886 meters to 1,648.5 meters.
No encouraging reservoir intervals were identified on the wire-line logs. After setting 9 5/8" casing at 2,898m, 8 1/2" hole was drilled to 3,648m (MD). The expected Brangull Sands at 2,092m and Panjgur sandstone at 3,200m were not encountered.
Joint venture then decided to record VSI survey at the depth of 3,648m (MD) when it was deciphered that a possible sandstone marker may be encountered around the depth of 3,900m. The VSI results have indicated lower velocities than deciphered in Pasni-1 well.
Based on the result of VSI, the joint venture decided to drill the well up to 4,000m (MD). After having drilled mudstone from 2,900m to 3,900m, a drilling brake was encountered at 3,891m and a clacareous silty mudstone sprinkled with siltysand grains was encountered in range 3,891m-3,907m but reversal of any pressure was not encountered.
The well flow was checked and bottom-up was carried out, but no florescence and gas shows were observed.
Thereafter, again mudstone was drilled down to 4,000m (MD). Attempts were made to record resistively when the tool did not go past 3,850m. However, while going down, the log was recorded to that depth.
The report clearly mentioned that ill planning and lack of experience of the management consultant added substantially to loss and proved this project as the most costly one.
The report talked about mismanagement and bad planning in clear terms. It said: "While logging tool was at 3,850m, well started flowing, and the tool was pulled out to 3,810m, where it got stuck. Attempts were made to pull the logging toll loose and pull out of the hole while well was still flowing."
It added that Schlumberger's engineers managed to pull the logging tool to 3,160m where it again got stuck.
Attempts were made to release the tool when the cable parted from the weak point, leaving the tool in the hole. During the logging process, a total of 18bbl gain was recorded. After pulling the cable out, the open end pipes were run to 2,882m and well was circulated when water-cut mud, with mud weight of 17.4ppg was observed.
It is also worth mentioning here that Ocean Energy, a US-based company, had drilled the well in the same area for $12 million in 40 days.
The report indicated other stakeholders' concerns. It said that GHPL disagreed with the operator, PPL, that it was bad weather, which caused loss and held it responsible for loss time that counts for money as every passing day add substantially to total expenses of such a big project.
Its representative had inquired from the operator in one of the joint venture meetings that out of total lost time, only 2.8 percent was due to weather problem and rest loss of time was due to drilling crew inefficiency and lack of proper planning.
The GHPL's point of view was upheld by the ministry officials in various meetings. In one of the meeting, the chairman, who represented the ministry, took strong notice of the PPL's poor performance and said delay in drilling was due to lack of proper supervision and operator should meet deadlines.
The operator agreed with the chairman's comments and informed the meeting that in order to increase the crews' efficiency, we have replaced personnel at the site.
In one of the meetings of the joint venture, the chairman, who represented the petroleum ministry, rejected the PPL remarks and said personnel change will not only be enough and operator would have to be proactive in planning rather than reactive and remarked that out of 38 percent lost time, 30 percent was due to lack of planning and supervision.
The chairman expressed apprehension on the drilling operations carried out so far and advised the operator that by optimising and smooth running of future drilling operations, operator should try to complete the well and make efforts to demobilise the rig before the onset of monsoon expected by the end of May, 2005, which never happened.
The chairman directed the PPL it should focus on improvement in the crew efficiency and also commented that if any thing goes wrong in the deeper section of the well it will result in further time loss.
But all this exercise went in vain as it could not curtail the loss that finally went up to $31 million. It is interesting that the operator gave technical details to the ministry but never mentioned the cost and reason of irrationally high expenditure. It only talked of rig fixation but in a very light mood, as no expenditure were incurring on it.
It said: "As verbally informed, and to release the rig as soon as possible the operator is proceeding with the abandonment programme."
Finally, the operator conceded that mud-log and the logging results made it evident that no potential sand reservoir was encountered in Pasni X-2 and the well is being abandoned.
It maintained that a formal miscellaneous notice in compliance with Clause 58, Part VI of Pakistan Petroleum (Exploration and Production) Rules, 1986 was being submitted to DGPC's of the petroleum ministry for approval.
This case needs attention of the top brass. One can expect that the decision-makers will look into it and order investigations to fix responsibility of poor handling and mismanagement of the well that led to loss of over $31 million to the national exchequer.