Wellhead gas prices are likely to witness a jump of 11 per cent for 1HFY12 owing to 32 per cent rise in international crude oil prices on a semi-annual basis to $103 per barrel and a 32 per cent jump in furnace oil prices to $589 per tonne. However gains from depreciation of the Pakistani rupee against the greenback will remains negligible owing to mere adjustment of 0.5 per cent.
Uncapped fields including Sui, Kandkhot, Sawan, Miano, Pariwali and Pindori are likely to benefit the most depicting an increment of 18-20 per cent. Furthermore, the wellhead gas price for Qaidrpur field is expected to go up by 0.5 per cent on account of currency depreciation as the provisional discount table for HSFO price is capped at $320/tonne. On the other hand, gas prices for capped fields including Manzalai and Makori are expected to remain unaltered.
PPL is poised to yet again to reap the benefits as more than 75 per cent of its revenue pie is derived from natural gas. Gas production from uncapped Sui and Kandkhot fields constitutes the lion’s share (60 per cent) of overall gas sales, but the overall impact is curtailed by rising production from capped fields like Manzalai and Makori.
Realised WHP for PPL therefore may increase to the tune of 17-20 per cent for 1HFY12, out performing the industry average and be the source of positive earnings. Albeit, rising contribution of natural gas to the topline (31 per cent) can be termed as a paradigm shift for POL, however further augmentation from capped fields through Manzalai CPF may constrict ability to fully harness organic boost.
