PAKISTAN

PAKISTAN

Bhit & Badhra Fields (KUFPEC: 34%)
These fields are located in the Kirthar fold belt of the Lower Indus basin. During 2010, KUFPEC’s average field net production was 19,731 boepd. The fields produced higher than forecast due to high demand and production was maintained due to the well head compressions. The Bhit compression project, initiated in late 2007, successfully progressed according to schedule. The full system was scheduled to be operational by 15 December 2010 but was delayed due to heavy flooding in the area and the new completion target is 1st March 2011.

The Badhra Development and Production Lease for Area A is approved and Area B will expire in January 2011. The JV applied for a further 12 months’ extension to fully evaluate the area.

Kadanwari (KUFPEC: 15.789%)
Net production from the Kadanwari gas field averaged 1,659 boepd. The production increased as a result of additional development drilling in the western part the field. Upon the completion of the extended well test of the Latif field in the neighboring block, the joint venture partners agreed to process 50 mmscf pd of Latif gas through the Kadanwari facilities. This will result in an increase of revenue for the Kadanwari joint venture. The Latif extended well test tie-in was completed and gas processing commenced in January 2009. Additional wells are planned to be drilled in the southeastern part of the field.

Qadirpur Field (KUFPEC: 13.25%)
KUFPEC’s gas production from the Qadirpur field averaged 9,946 boepd during 2010. Gross production was 10% lower compared to previous years mainly due to the delay in the Compression project. A well head compression project was initiated in 2008 to maintain plateau production up to 2017 but was delayed due to unavailability of compressors. In 2010, 13 compressor units were installed and commissioned. Currently the field is processing about 600 mmscfpd. Permeate (low BTU) gas was also supplied to Engro & Liberty Power Plants. Two more compressors are planned to be installed by the end of February 2011.

The revised development plan was approved and the development and production lease was extended for five years (in the initial term) up-to 2017, and there is a provision to obtain another five-year extension.

The northern part of the field is under the Indus River flood plains, therefore the construction of a platform is in progress to drill three Extended Reach Wells. The first well is expected to spud by 15 March 2011.

Zamzama Field (KUFPEC: 9.375%)
Gas production in 2010 from the Zamzama field averaged 5,747 boepd. The production was low compared to 2009 due to operational problems related to the Phase II expansion project, and the shut-in wells due to heavy flooding in the area. Also the Zamzama-3 well was shut-in due to water loading. The Phase II project is still in the commissioning stage and currently processing 90 mmscfpd. The Front End Compression project is progressing as per schedule and expected to produce first gas by July 2011.



Zarghun South (KUFPEC: 3.75%)
Gas delivery is currently pending on the execution of a Gas Purchase Agreement (GPA) by the Directorate General (Gas). The project became uneconomical due to escalation of the field development costs. To render the project economics, the operator is in discussions with the government to change the gas price mechanism.

 YEMEN

East Shabwa Block-10 (KUFPEC: 14. 2857%)
The East Shabwa average net production during 2010 was 3,927 boepd. The average field production increased 18% compared to 2009 due to additional drilling and completion of a number of facilities expansion/upgrade projects.

The Joint Venture Partners approved the Kharir Power Plant (KPP) project that will significantly reduce the fuel cost and will supply extra electricity power to the public. The Clean Development Mechanism (CDM) was also launched in 2010 to reduce gas flaring and CO2 emission. Currently the Joint Venture is reviewing options for applying for an extension to the development lease.



Jannah Block 5 (KUFPEC: 20%)
Oil production from the Jannah block averaged a net of 2,557 boepd during 2010. The field gross production was maintained even though the 2010 drilling campaign was delayed by six months due to rig unavailability. Currently the rig has arrived in country and will spud the first well by end January 2011 including two basement wells.

Al Barqa Block 7 (KUFPEC: 20.25%)
This onshore exploration permit covers 4,939 km² and was ratified by the Yemen Parliament on 8 March 2008 for an initial 3-year exploration period. Two drillable prospects were identified on the basis of recently acquired 3D seismic. The Al Meashar-1 well was drilled and tested between 200-900 boepd from fractured basement and the well was suspended. The Jabal Milh-1 well was drilled in the northern part of the block but was suspended with oil shows in basement. The third exploratory well Al Meashar-2 was drilled to confirm the productivity of the Al Meashar-1 but failed to produce. The block will expire in March 2011 and the Joint Venture Partners agreed to apply for an extension of 12 months in first exploration period.

Quzah Block 74 (KUFPEC: 21.25%)
Block 74 was provisionally awarded in July 2005 and was ratified by Yemeni Parliament on 8 March 2008. This onshore exploration permit covers an area of 1,309 km². In 2010, 276 kms of 2D seismic was recorded and processing is expected to be completed by end January 2011. The block will expire in March 2011 and the Joint Venture Partners agreed to apply for a 9-month extension in the first exploration period to fulfill the remaining commitment.



Mukalla Block 15 (KUFPEC: 45%)
KUFPEC secured an additional 18 month extension effective from 14 November 2009. Geo logical studies continued to fully evaluate the prospectivity of this block.