KARACHI – Drilling by the oil and gas exploration companies in Pakistan has slowed by 32 percent in the first half of the financial year 2011, despite government’s focus to tap more indigenous energy resources.
A meagre 19 wells have been drilled as compared to 28 in the last corresponding period and the number is inclusive of both exploratory and development wells. This hampered drilling activity could reduce the much needed future of oil and gas production.
According to data compiled by the Pakistan Petroleum Information Services (PPIS), 28 exploration and production companies in Pakistan have drilled only 19 wells, significantly less than the targeted 80 wells in fiscal year 2011.
Last year, 28 wells were drilled during the first half compared to the target of 100 wells. Two reasons are cited as primary problems for this underperformance. Firstly, the incessant circular debt has reduced liquidity, restricting portfolio drilling. Secondly, continuation of the carry over wells of last year has deviated focus of the Exploration and Production from new wells.
The FY11 has seen the Oil and Gas Development Company drill 10 exploratory wells. However, only one exploratory well was drilled during the first six months of the year, while in the same period of last year, the company drilled four exploratory wells out of its targeted 23 wells.
The company has to drill 31 wells including both exploratory and development wells but so far it has drilled seven wells (one exploratory and six development). However, only six exploratory wells have been drilled out of the targeted 29 exploratory wells in the whole industry.
Similarly, performance of development wells is also on the lower side where only 13 development wells have been drilled out of 51 wells targeted for full year FY11.
The six exploratory wells drilled during 1HFY11 have not helped in any discovery, while work on only three wells is being carried as the residual wells have already been found dry. Work on development wells, contrarily, has been found satisfactory. Out of 13 development wells, seven proved to be oil and gas producers whereas work on five wells is under way.
Including the 15 wells of previous years, on which drilling work is still continued, the E and P has drilled 34 wells during the 1HFY11 compared to a total of 55 wells in 1HFY10, said Farhan Mahmood at Topline. He added that amongst 15 carry over wells, three wells are one to three years old.
Oil drilling takes a hit, falls 32 percent
