Oil, gas production down in November

Drilling activity range-bound, exploration and production companies plan to drill only 80 wells in 2011.

The amount of gas produced by exploration and production (E&P) firms operating in the country fell to 3.8 billion cubic feet per day (bcfd) during the month of November, down five per cent from the same month last year. Meanwhile, oil production also fell to a seven-month low at an average of 63,000 barrels per day (bpd), according to a research report published by Topline Securities that cites provisional numbers released by the Pakistan Petroleum Information Service.

The oil production figure shows a drop of six and four per cent compared with November 2009 and October 2010, respectively. Gas production, on the other hand, is down 12 per cent from the peak level of 4.3bcfd witnessed in March.

Flat over five years

Despite government efforts, local oil and gas production has been range-bound over the past few years. Average production during the first five months of fiscal 2011 – 64,000bpd for oil and 3.9bcfd for gas – is quite similar to the situation five years ago when average oil production was recorded at 65,000bpd and gas production at 3.8bcfd.

Drilling activity down
as well

The report points out that only 14 wells (exploratory and development) were drilled between July and November this year (equivalent to 2.8 wells a month), compared with 23 wells during the same period last year (4.6 wells a month).

In fiscal year 2011, E&P companies plan to drill a total of 80 wells (approximately 6.6 wells a month) against the 68 wells dug in fiscal year 2010.

Like production, drilling activity also seems to have been range-bound since four years ago when E&P companies used to drill 6.4 wells a month on average.

“With growing circular debt there are chances that oil production will remain range-bound as drilling activity may slow down except for a few private E&P companies like Pakistan Oilfields (POL) on which the impact of circular debt is minimal,” reads the report prepared by Farhan Mahmood from Topline.

Published in The Express Tribune, December 15^th, 2010.