Despite an obvious need for an accelerated drilling programme for oil and gas reserves, activity remained largely muted in fiscal 2011. Challenging security environment and the circular debt adversely affected the exploration and production sector’s drilling activity as only 42 wells have been spudded against the full-year target of 80 wells in fiscal 2011 so far, according to Topline Securities.
Although 13 days are still left in the current financial year, the target is likely to be missed by 38 per cent against 68 wells drilled last year.
Furthermore, a total of four predominantly oil discoveries were struck in the year, translating into a success ratio of 33 per cent, inline with the historical success ratio of 30 per cent.
On the positive note, average discovery size stood approximately at 1,040 barrels per day against 450 barrels per day last year. Pakistan Oilfields (POL) and Pakistan Petroleum (PPL) are the major beneficiary of the aforementioned factors, according to a Topline Securities research note.
On a positive note, exploration activity in Balochistan finally resumed after a lapse of two years.
OGDC does only 30% of the job
Oil and Gas Development Company (OGDC), the country’s largest exploration and production company, drilled only 3 exploratory wells against target of 10, while showing its inclination towards maximising returns from existing fields, says the note.
Published in The Express Tribune, June 24th, 2011.