Oil Discovery at All-time High in March

From DAWN.COM

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.

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