Inside Financial Markets

Pakistan’s oil production reaches two-year high

Pakistan’s oil production reached a two-year high of 97,000 barrels per day in December 2016 after oil and gas exploration and production companies geared up their drive to find new deposits of hydrocarbons in the country.

Nabeel Khursheed, an analyst at Topline Securities, said in a note to his clients that the surge in production became possible with find of new oil reserves from Nashpa and Mardan Khel fields.

“Both fields added around 11% to December 2016’s oil production, a cumulative flow of around 10,000 barrels per day (bpd) of oil,” he said.

The production meets around 20% of domestic demand. The remainder is met through imported crude oil and finished petroleum products.

Local production was reportedly hovering below 90,000 bpd in November. This was standing at 87,000 bpd in the previous fiscal year ended June 30, 2016 and 95,000 bpd in the year before. The decline in production in fiscal year 2015-16 (FY16) was seen after oil producing firms put on hold their projects under the then prevailing steep low oil prices in the world market.

State-owned Oil and Gas Development Company (OGDC) was maintaining the highest reserves of oil and gas in the country, as its share in local crude oil production stands above 50%.

During December, OGDC, Pakistan Oilfields and Pakistan Petroleum Limited registered record oil production levels of around 48,000 bpd, 18,000 bpd and 8,000 bpd, respectively.

This was on the back of addition from Nashpa (OGDC and PPL hold 56% and 26% stakes) and Mardan Khel (POL and PPL hold 28% stake each while OGDC holds 21%).

Flat gas production

Gas production, however, remained almost stagnant at around 4,000 million cubic feet per day (mmcfd) mainly due to “absence of any significant addition and natural depletion of existing fields,” the analyst added.

Normalised flow from Kandhkot field (13% of PPL’s total gas production), up from 89mmcfd (faced technical issues last year) in December 2015 to 205mmcfd in December 2016 and 32mmcfd addition from Shahdadpur field nudged up PPL’s gas production.

OGDC’s gas production during December 2016 shrunk on the back of lower flow from Uch (26% of gas production), down 12% and Qadirpur (22% of gas production), down 7%.

“First half of fiscal year 2017’s cumulative hydrocarbon production numbers remained broadly in-line with our estimates,” Khursheed said.

With another expected addition of around 100mmcfd of gas and 4,000 bpd of oil from much awaited OGDC’s Kunnar Pasaki Deep (KPD) project in second half, “Pakistan’s total oil production will likely cross 100,000 bpd to average 95,200 bpd in FY17. This will take Pakistan’s total hydrocarbon production to average 778,000 boed {Barrels of Oil Equivalent per Day},” he said.

Baqar Hussain

A Wannabe CFO, just had stepped in the corporate sector, willing to explore every aspect here and learn as mush as i can, awareness for those who dont, get the info where ever possible and stay up to date always.

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Inside Financial Markets was a joint publication of Pakistan Stock Exchange (PSX)and Society of Technical Analysts Pakistan (STAP)