- File Photo
KARACHI: The oil and gas exploration companies were able to drill out 92,905 barrels of oil per day (bopd) in March this year, which the sector experts cheer as the all-time high production of crude in the country.
In nine-month (July-March) FY14, the country produced an average 83,000 bopd, up 11pc over 75,000 bopd in corresponding period of the previous year.
The production of natural gas, on the contrary, slowed down by 4pc in 9MFY14 to 4bcfd compared to 4.1bcfd in 9MFY13. Yet, the bottom line of exploration and production companies has brightened.
Vahaj Ahmed, a sector analyst at brokerage Topline Securities, explained why: The net realised prices on oil sales work out at 5.5 times that on gas.
During 9MFY14, Arab Light prices averaged $108.6 per barrel, down from $109.7 YoY. The E&P companies also enjoyed the windfall of a surprise rupee appreciation of 8pc against the dollar. Pakistan’s oil production has rapidly increased by 7pc to 83,000 bopd, from 77,000 (bopd) at the start of the current year.
Interestingly, it had remained in the range of 62,000-70,000 bopd between the financial years 2003 to 2012. Many people would recall that wells spudded in those nine years were found to be dry.
So what has led to the recent series of discoveries: improved technology or good luck? An Anglo-Saxon oil expert whose company competes with others in the field in Pakistan was asked. He smiled and answered, “A bit of both”.
All of that is not to say that the country would be self-sufficient in the energy resources in distant future, but the E&P companies are surely making discoveries — as is evident by a series of filings with the country's stock exchanges.
Most oil and gas exploration companies, mainly the foreign giants that are now combing the surface and hitting the right spots, loathe to disclose figures.
But the handful of companies in the public sector and listed, have however to reveal it all.
Pakistan Oilfields Limited (POL) showed improvement of 25pc in oil production in 9MFY14 with the cumulative production of oil and gas at average 20,000 boed up by 10pc over 18,000 boed YoY.
In the 9MFY14, combined average oil and gas production of Oil and Gas Development Company (OGDC), the largest in the field, was down 3pc at 248,000 boed compared to 256,000 boed YoY.
Oil production of OGDC increased by 2pc to 41,000 bopd against 40,000 bopd in 9MFY13. Average oil production of Pakistan Petroleum Limited (PPL) recorded growth of 27pc to 12,000 bopd from 10,000 bopd YoY.
Energy experts stress the importance of discovering indigenous sources of hidden oil and gas, for the world is hungrily eyeing those energy sources that power the wheels to turn.
Worldwide discovery of oil peaked in 1964 and has followed a steady decline since. According to industry consultants IHS Energy, 90pc of all known world reserves are in production, suggesting that few major discoveries remain to be made.
The world now consumes 85 million barrels of oil per day, or 40,000 gallons per second, and demand is growing exponentially. There have been no significant worldwide discoveries of new big reserves of oil since 2002, but the commodity is now depleting fast as the consumption is four times faster than its discovery.
“The situation is becoming critical,” an oil and gas expert stated the obvious.