Exploratory drilling down 32%

Exploration and production companies drilled only 19 wells compared with the target of 80 wells for 2010-11.

KARACHI: Oil and gas exploration drilling in the country slowed down by 32 per cent in six months (July to December) of the current financial year 2010-11 at a time when the government is striving to tap more indigenous energy resources.

This is negative in a sense that the slowdown in drilling activity could reduce the much-needed future oil and gas production, according to Topline Securities.

No discovery has been made so far from the drilling in the first half of 2010-11, said Topline Securities analyst Farhan Mahmood in a research note.

Only 24% target achieved so far

The 28 exploration and production companies in the country have drilled only 19 wells compared with 80 wells targeted for fiscal year 2010-11, according to data compiled by Pakistan Petroleum Information Services. In the first half of fiscal 2009-10, 28 wells were drilled by these companies.

The swelling circular debt has affected the companies’ liquidity and restricted their drilling portfolio, said Mahmood.

Moreover, carry-over wells of last year are compelling the companies to focus more on them rather than new wells.

Oil and Gas Development Company drilled just one exploratory well so far in the current fiscal year against its target to drill 10 wells. The company drilled four exploratory wells during the same period last year against the target of 23 wells.

Published in The Express Tribune, January 19^th, 2011.