Oil and gas: Attacks disrupt production at two fields

Armed men attack a vehicle carrying employees, gun down one person and injure another.

KARACHI: Gas output from Uch field has dropped 58 per cent due to suspension of production from a well after a terrorist attack and lower demand from the Uch power plant.

Although the decline in production from Uch is understood to be temporary, law and order situation at the field remains volatile as another attack on Oil and Gas Development Company (OGDCL) employees has been reported, said IGI Securities analyst Umair Siddiqui.

In the latest incident, unknown armed men attacked a vehicle carrying employees of Uch gas field in Goth Dirgi area of Jaffarabad district on Friday and gunned down one person and injured another.

Earlier this month, unknown men blew up a gas well in the  Uch district. Oil and Gas Development Company (OGDCL) is the sole operator of Uch field. The field contributes approximately 19 per cent to the company’s overall gas production but after the recent dip its contribution has come down to nine per cent.

Maramzai field still shut

Production from Maramzai field has remained suspended for two weeks following an attack on the employees of MOL, the field operator.

Maramzai is closer to the Hangu district of Khyber-Pakhtunkhwa, a region where law and order conditions remain uncertain, said Siddiqui.

Gunmen on January 22 intercepted a convoy of the Hungarian firm between Lachi area and Hangu district and abducted two engineers, who have still not been found.

In December, two other staffers working at the site were abducted who were recently recovered, according to an official associated with the field.

Production at Maramzai field will not resume until the government provides security in the area, the official added.

Production from the field may remain shut for another two to four weeks as negotiations are going on among various stakeholders over the security situation, according to analyst Siddiqui.

The stoppage means a reduction of 30 million cubic feet (mmcf) per day of natural gas to the Sui Northern Gas Pipelines Limited (SNGPL) as well as a fall in domestic production of 1,600 barrels per day (bpd) of crude oil.

If the closure continues for a month, the likely impact on the earnings per share of Pakistan Oilfields, Oil and Gas Development Company and Pakistan Petroleum is expected to be 30 paisa, two paisa and seven paisa, respectively. Development work at Mela field is going on and an additional 2.5 thousand barrels per day (kbpd) of oil is expected in the next two to three months. OGDCL and Pakistan Petroleum Limited (PPL) have a 56 per cent and 26 per cent stake, respectively, in the field.

Published in The Express Tribune, February 5^th, 2011.