Pakistan’s average oil production jumped 13% to 86,000 barrels per day (bpd) in fiscal year 2013-14 compared to a year earlier with petroleum exploration companies benefiting from higher price gains, a brokerage house said on Thursday.
The oil output even reached an all-time high of 98,000 bpd by the end of June 2014, up 22% compared with 80,000 bpd pumped out in June 2013, said Vahaj Ahmed, an analyst at Topline Securities.
“Average (gas) production during the year dropped 2% to 3,984 mmcfd (million cubic feet per day) versus 4,081 mmcfd. Hence, cumulative hydrocarbon production in Pakistan dropped by an average of 1% to 796,000 barrels of oil equivalent per day (boed),” he said in a report.
Gas production was marginally up 2% to 3,904 mmcfd at the end of fiscal year 2013-14 versus 3,826 mmcfd at its start.
Since net realised prices on oil sales were five times higher than that for gas, revenue growth from the increase in oil output outweighed the loss from the decline in gas production for the exploration and production companies, he said.
With 26% growth in average oil production and 3% higher gas output, cumulative production of Pakistan Oilfields (POL) rose 9% to an average of 20,000 boed versus fiscal year 2012-13.
It benefited mainly from additions in the Tal block, in which it enjoys a 21% working interest. Average oil production rose 63% to 17,000 bpd in the block, which contributes 20% of total oil produced in Pakistan.
Production from three new fields – Mamikhel-2, Maramzai-2 and Makori East-3 – helped POL to offset the decline in Manzalai.
On the other hand, Oil and Gas Development Company (OGDC) saw a 2% decline in its output, which was around 252,000 boed compared to 257,000 boed in previous year.
Pakistan Petroleum Limited (PPL) recorded average production of 160,000 boed in fiscal year 2013-14, down 6%, the report said.
Industry officials believe that Pakistan’s crude oil output is expected to increase to 130,000 bpd in one or two years, a sharp rise from the stagnant 66,000 bpd seen in the last few years.
While there remains uncertainty over the exact size of oil reserves in the absence of any broad geological survey, Pakistan has estimated recoverable reserves at 27 million barrels.
The petroleum industry generally believes Pakistan’s geology is gas-prone rather than having any substantial oil potential. The fact that companies have to drill deep wells to find hydrocarbon reserves adds credence to this argument.
Higher oil production does not mean it will help the balance of trade substantially since the country spends a lot on importing petroleum products like diesel and furnace oil.
Published in The Express Tribune, July 25th, 2014.
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