OGDC to add 350mmcfd in less than 18 months

Exploration giant also seeks to boost oil production and tap shale gas.

LAHORE:

The country’s largest oil and gas explorer Oil and Gas Development Company (OGDC) seeks to add 350 million cubic feet per day of gas (mmcfd) in the next 12 to 18 months from five ongoing drilling projects in different parts of the country.

In a corporate briefing at the Lahore Stock Exchange, OGDC Chief Financial Officer Muhammad Rafi also said, “In addition to supplying 350mmcfd, the company seeks to also produce 14,000 barrels of oil a day through the five projects.”

The exploration giant had incorporated the latest equipment and trained staff, but investors should know the fact that exploration is a highly technical, risky and a capital intensive job, and it normally takes years before supply and benefits can be realised, said Rafi.



“The job depends on location. If the location is easily accessible then it normally takes two to four months for the field to start spurting oil, but if we drill in far-flung areas then the process might take up to two years,” the CFO said. On the other hand, gas fields take three to five years to develop as proper infrastructure such as pipelines needed before starting production.

Commenting on self-sufficiency of Pakistan with regards to oil and gas supply, Rafi said that it was not possible for him to determine a date for this. “It is a continuing business. No one knows how large or small the oil and gas reserves are and the only thing we can do is to show the additions in production by adding them to the networks,” he added.

OGDC has managed to successfully acquire 29 exploration blocks by participating in competitive bidding in March. The acquisition means more discoveries of reserves, more production and diminishing shortfall in the coming years, said Rafi.

Commenting on shale gas reserves, the OGDC CFO said that the technology was relatively new to Pakistan and was in its infancy. “Even though we have huge shale gas reserves and a dedicated research team working on shale gas technology, it will take years to start production.”

OGDCL, incorporated in August 1961 is a public-limited company, with over 60 producing fields of oil and gas. The government is the biggest shareholder and currently holds 74.97% interest in the company. The company holds the largest reserves and production share of oil and gas, covering 21% of Pakistan’s total acreage awarded. The company enjoys 54% of total local oil production at 41,400 barrels per day. In gas production, the company has 26% share and produces 1,089mmcfd.

OGDC’s revenue for the fiscal year 2012-13 stood at Rs223 billion and net profit at Rs91 billion. The company has contributed Rs130 billion to the national exchequer in the shape of different taxes. The exploration giant’s market capitalisation was over $51 billion and the company is rated to have the best success rate in the world. The success ratio for the company is 1:2.8.

Published in The Express Tribune, September 13^th,  2013.

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