Challenging security environment, notorious circular debt and delay in some projects due to litigation have adversely affected the country’s hydrocarbon production activities in fiscal 2011, according to a Topline Securities research note. During the outgoing year, hydrocarbon production remained almost flat, at 769,000 boepd (barrel of oil equivalent per day), for the third consecutive year despite the growing energy appetite of the country.
Contrary to the industry trend, Pakistan Oilfields (POL) on the back of its working interest in the Tal block showed a significant improvement of 39 per cent in its production while production of other major listed companies Pakistan Petroleum Limited (PPL) and Oil and Gas Development Company (OGDC) crawled up 0.5 per cent and 3.4 per cent, respectively.
POL and PPL benefit from Tal and Naspha
POL, benefitting from its working interest in the Tal block, witnessed increase of 11.2 per cent and 39.3 per cent in oil and gas production to 4,578 (barrels per day) bpd and 86 million cubic feet per day (mmcfd), respectively.
Furthermore, PPL’s oil production propelled by a massive 48.8 per cent to 7,419 bpd on account of its working interest in both Tal and Naspha block, while the same blocks improved gas performance to cover the reduced production from other major fields including Sui, Khandkhot, Sawan and Miano.
On the other hand of the spectrum, OGDC’s oil production declined by 1.6 per cent while gas production increased by 3.4 per cent compared with last year.
Another year of depressed performance
The country’s hydrocarbon production is expected to show a mere decline of 0.6 per cent to 769,000 boepd in fiscal 2011.
However, gas production decreased by 0.6 per cent to stand at 4 bcfd while oil production show a minor increase of 0.9 per cent to 66,00 bpd.
Major culprits behind the reduced gas production are Sui (-4.4 per cent), Qadirpur (-2 per cent), Zamzama (-23.1 per cent), Sawan (-1.1 per cent), Kandkhot (-5.5 per cent) and Miano (-4.8 per cent), which contribute approximately 48 per cent to the country’s gas production. Moreover, the natural floods was another major factor behind the decline trend, says the note. The only notable increase was witnessed in Manzalai field production, up a massive 67 per cent.
Yielding the maximum from existing fields
In addition to subdued production numbers, sector exploration activity remained muted as well, says the note. However, this conservative approach will be covered if the industry yields the maximum from its existing reservoirs and fast track its few delayed projects.
Published in The Express Tribune, July 15th, 2011.