OGDC misses drilling target for third year

E&P sector focuses on existing reservoir rather than finding new sources.

KARACHI: Oil and Gas Development Company (OGDC), Pakistan Petroleum Limited and fellow peers have failed to do their part in coping with the power outage. The exploration and production (E&P) sector is on the verge of missing the drilling target for the third consecutive year, data shows.

So far 50 wells have been drilled in the financial year 2012 against a target of 76 wells, according to a Topline Securities research note issued on Wednesday.

Bifurcation of the numbers reveals that the sector continued to focus on maximising the yield from its existing reservoir rather than drilling and finding new reserves.

Besides circular debt, heightened security perception particularly in Khyber-Pakhtunkhwa and Balochistan is also the major reason behind this trend that is limiting the regions available to the sector.

With a few days of the financial year still to go, 66% drilling target has been achieved so far in the period under review compared with 59% and 69% achieved in fiscal 2011 and fiscal 2010, respectively.

OGDC achieves 50% of  its target

Amongst the listed sector, OGDC has so far drilled only two new exploratory wells against the target of 13 as it kept its focus on its existing fields. The company drilled 12 development wells against the target of 15 wells.

Furthermore, the company made only one discovery during the year that is Zin which disappointed investors because of its low discovery size while another well Jabbi is in testing phase, says the note.

Published in The Express Tribune, June 28^th, 2012.