Oil and gas production remained flat in FY11

Challenging security environment, notorious circular debt and delay in few projects due to litigation have adversely affected country’s hydrocarbon production activities in FY11, said the analysts.
They said during the year, cumulative hydrocarbon production remained almost flat at 769k boepd (barrel of oil equivalent per day), in its third consecutive year of stagnant production despite growing energy appetite of the country.
Contrary to industry trend, POL on the back of its working interest in Thal block showed a significant improvement of 39 per cent in its production while production of other major listed companies like PPL and OGDC increased by 0.5 per cent and 3.4 per cent, respectively, they said. “Collating the weekly data released by Pakistan Petroleum Information Services for the month of June, we expect country’s hydrocarbon production to show a mere decline of 0.6 per cent to 769k boepd in FY11,” said Nauman Khan of Topline Securities.
Major culprits behind the reduced gas production are Sui (-4.4 per cent), Qadirpur (-2.0 per cent), Zamzama (-23.1 per cent), Sawan (-1.1 per cent), Kandkhot (-5.5 per cent) and Miano (-4.8 per cent), which cumulatively contribute approximately 48 per cent to country’s gas production. In addition to the natural decline, floods last year was another major factor behind the declining trend in FY11. The only notable increase was witnessed in Manzalai field production, up by a massive 67 per cent.
Startling performance from Thal and Naspha blocks’ fields diluted the impact of reduced production from Kunnar (-10.5 per cent), Chanda (-10.0 per cent), Zamazama (29.8 per cent), Bobi (-13.9 per cent) and Sono (-9.3 per cent) fields. Cumulatively production from the said two blocks increased by a massive 71 per cent to 16,944bpd against 9,895bpd and now contributes approximately 26 per cent to country’s oil production. POL’s oil and gas production increased by 11.2 per cent and 39.3 per cent to 4,578bpd and 86mmcfd, respectively. Furthermore, PPL oil production propelled by a massive 48.8 per cent to 7,419bpd on account of its working interest in both Thal and Naspha block. At the other end of the spectrum, OGDC’s oil production declined by 1.6 per cent while its gas production increased by 3.4 per cent compared to last year. In addition to subdued production numbers, sector exploration activity remained muted as well, which may manifest itself in future production numbers. However, this conservative approach would have been more than offset by the sector ability to yield the maximum from their existing reservoirs and fast tracking of a few delayed projects namely KP-TAY and Sinjhoro blocks.