KARACHI – With its stock price having witnessed a steep fall in previous weeks (losing 11 percent in the last 10 trading sessions), the Oil and Gas Development Company (OGDC) still faces considerable problems, including potential delays in CAPEX plans and systemic circular debt.
Circular debt remains a key concern for the company as its trade debt have now soared Rs 107.9 billion as of December 2011. Similarly, the initial CAPEX target of $800 million is also likely to be missed due to the security situation in the country. With regards to its development projects, the management in its recent conference call highlighted revised timelines for its key development projects like Sinjhoro which is now expected to be operational by August 2011. The project is expected to raise OGDC’s production by 3,000-3,500 BPD of oil and 25-30 MMCFD of gas.
For its KPD/TAY project, OGDC has already received bids and the evaluation process is underway. The expected completion timeline of the project is September 2012 and the management anticipates production of 4,400 BPD of oil and 284 MMCFD of gas to be added after completion. Regarding the Dakhni expansion project (estimated production rise of 720 BPD in oil), the company received the SRU unit last year and all other equipments have been installed. Completion of the Jhal Magsi project is targeted for March 2012 and is likely to increase gas production by 15 MMCFD.
At Qadirpur field, all 14 compressors have been installed with the field’s raw gas supply ranging between 590-600 MMCFD. Full commissioning of the project is now expected in the next few weeks. Furthermore, OGDC has already drilled six wells under the UCH 2 development project and the gas production is likely to reach 410 MMCFD. The project is likely to be completed by May 2012.
