Wellhead prices expected to rise 6 per cent
Wellhead prices are expected to rise up to six per cent, according to JS Global Capital analysts.
Wellhead gas prices in the country are revised on half yearly basis, depending on the average Arab Light Crude and HSFO prices in the preceding six-month period.
The average price of Arab Light Crude increased eight per cent to $77 per barrel during this period versus $72 in the previous six months. Similarly, HSFO prices increased by nine per cent to $459 per ton in the same period.
Decline in dollar-rupee parity to improve benefit
Rupee also depreciated by around two per cent against the dollar from December 2009 to May 2010. This fall in the exchange rate would further improve the gas pricing for the Exploration and Production (E&P) companies.
Six per cent hike likely in Sui & Kandhkot prices
Sui and Kandhkot wellhead prices are expected to rise six per cent and JS Global analyst expects that Pakistan Petroleum will benefit from this as the two fields contribute around 80 per cent of total gas production of the company.
Other uncapped fields to witness two per cent rise
Other than Sui and Kandhkot, gas fields governed under the Petroleum Policy 1997 are also likely to witness a rise in the vicinity of two per cent versus the existing wellhead prices. Sawan, Miano, Pariwali, Pindori and Turkwal are key fields operating under the 1997 policy.
On the contrary, fields governed under the policy of 2001 including Manzalai, Makori and Mela would not be subject to revision in wellhead prices due to $36 per barrel cap on their pricing formula.
Published in the Express Tribune, June 16th, 2010
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ