PHOTO: REUTERS
“The financing facility will allow the company to invest aggressively in exploration and development activities, which will result in more discoveries and enhanced production...{This} will also significantly help in overcoming the prevailing energy crisis in the country,” Assad Rabbani, Company Secretary, said in a notification sent to the Pakistan Stock Exchange on Wednesday.
Mari Petroleum hits new gas reserves in Ghotki
In the annual report, MPCL Managing Director and CEO Nadeem Ahmed has said that an extensive 3D seismic survey over Mari lease area showed promising new prospects in shallow areas in Balochistan and deep Lower Guru formations in Sindh.
“These will be drilled in the coming years of 2016-17 and 2017-18 and there is a good chance of discovering substantial gas reserves,” he said.
The borrowed amount is equivalent to 91% of Rs9.92 billion the company spent on exploration activities in the previous fiscal year ended June 30, 2016.
During the year, it produced 30.48 million barrels of oil-equivalent energy, which saved around Rs142 billion in foreign exchange, said the annual report for 2016.
Net profit of Mari Petroleum rose 7% to Rs6.05 billion in FY16 compared to Rs5.65 billion in the preceding year.
Rabbani added in the notification the loan was a six-year term finance agreement with Habib Bank. It carries a markup of six-month Karachi Interbank Offered Rate (Kibor) plus 0.05%.
The announcement, however, failed to encourage investors to buy MPCL’s shares, as the broader market booked significant losses on Wednesday.
Mari Petroleum announces 'significant' oil discovery
MPCL stock fell Rs1.56, or 0.16%, and closed at Rs940.10 with a volume of 48,800 shares.
Ahmed said the most serious challenge Mari Petroleum faced during the year was acute shortage of exploration blocks for the extensive exploration programme. This was the outcome of delay on the part of government in the next round of bidding for new blocks.
MPCL tried to tackle this challenge by concentrating on the Mari lease and acquiring working interest in blocks of other companies.
Of these, it acquired 32% working interest in the Shah Bandar block, Sindh, in June 2016. The block is operated by Pakistan Petroleum Limited. It also took 20% working interest with operational control in the Bannu West block in partnership with Tullow Pakistan.
“These two blocks were selected after reviewing 52 blocks, which reflects our confidence in the likelihood of finding new reserves,” Ahmed said.
In addition to the Mari gas field, MPCL holds development and production leases in Zarghun South and Sujawal gas fields and has operatorship of eight exploration blocks - Ziarat, Harnai, Sukkur, Sujawal, Karak, Ghauri, Peshawar East and Khetwaro.
The company is also a non-operating joint-venture partner of leading national and international exploration and production companies in six exploration blocks - Kohlu, Kalchas, Kohat, Zindan, Hala and Bannu West - and the Adam X development and production lease.
The gas produced by MPCL is supplied to fertiliser manufacturers, power generation plants and gas distribution companies while crude oil and condensate are supplied to refineries for processing.
Published in The Express Tribune, September 22nd, 2016.
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