The crude oil output in Pakistan dropped significantly by 19% to 63,784 barrels per day in August 2021 while gas production fell 3% to 3,351 million cubic feet per day (mmcfd), increasing the country’s reliance on expensive imported fuel.
The major reason behind the drop is said to be annual overhauling at a couple of oil and gas fields. The completion of the annual turnaround (ATA) exercise will restore supplies to the levels seen at the beginning of August, but the output will remain notably low compared to the recent or record highs.
The situation demands that the government announce the much-awaited Petroleum Policy 2020 to re-energise the oil and gas exploration firms to increase efforts to find new hydrocarbon reserves and help slash the overall import bill.
At the same time, the oil and gas exploration firms were required to expand their area of work as a “huge untapped area is left compared to the one tapped mainly in Balochistan and Khyber-Pakhtunkhwa,” AHL Head of Research Tahir Abbas said.
There was a time when oil and gas companies avoided exploring some of the potential areas due to security reasons. “Now, the government has established peace in such areas,” he said.
The average oil and gas output stood at 78,708 barrels per day and 3,455 mmcfd respectively in the week ended August 3, 2021, reported Arif Habib Limited (AHL) while quoting the Pakistan Petroleum Information Service (PPIS).
“Oil production depicted a fall of 8.7% in the week ended August 31, settling at 63,784 barrels per day (bpd) owing to ATA at Nashpa,” AHL’s Tahir Abbas said while talking to The Express Tribune. “Meanwhile, gas production remained stable at 3,351 mmcfd.”
In the week ended August 24, the oil production recorded a decline of 10% week-on-week due to annual turnaround (ATA) at Mela field in addition to Nashpa. “Gas production dropped 2% in the week owing to the shutdown at Gambat South gas processing factory.”
Abbas recalled that in recent years oil production had stood at 95,000 bpd and gas at over 4,000 mmcfd.
The oil output rose above 100,000 bpd during early days of the previous Pakistan Muslim League-Nawaz government from 2013-18, the records suggested.
“The major reason behind the continuous drop in oil and gas production is the depletion of Pakistan’s available hydrocarbon reserves at a rapid pace,” Abbas said.
“On the other hand, the local oil and gas companies have remained unsuccessful in finding large reserves over the past two decades.”
Pakistan made the last big discovery, mainly of oil, in the Tal block. “The available reserves will end in next 16 years if we remain unsuccessful in making a big discovery.”
The demand for oil is estimated at over 500,000 bpd and gas at over 5 billion cubic feet per day. The country meets almost 70% of demand for energy through imports, which amount to one-fifth of the total annual import bill.
The government should announce the Petroleum Policy 2020 to introduce new incentives for the oil and gas exploration firms. “The government has done extensive work on the policy and it is expected to be introduced soon,” he said.
Published in The Express Tribune, September 12th, 2021.
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