Pakistan Oilfields Limited (PSX: POL) posted a massive growth in earnings for FY22 – 94 percent year-on-year to be precise. The oil and gas company’s earnings growth came from higher topline. Revenues for POL increased by 44 percent year-on-year on account of higher crude oil prices and Pak rupee depreciation. Crude oil prices were up by over 65 percent year-on-year in FY22, while currency depreciation of around 10 percent further gave topline a boost
However weak production stats for oil and gas continued to impact in the topline growth. On the product front, both crude oil and natural gas flows witnessed a decline of 9-19 percent year-on-year in FY22.
There was also a hefty growth in exploration and prospecting expenditure - rising by 77 percent year-on-year in Y22 due to increased seismic activity and hence increased geological cost. Finance costs posted a whopping increase of 20.4 times due to rising interest rates. However, the positive impact of higher currency depreciation was seen in seven times growth in other income due to exchangegains. FY22 performance for Pakistan Oilfields Limitedwas primarily driven by higher oil prices and currency depreciation – both indicators of volatility. Meanwhile, what is a key concern for POL and other E&P companies is the falling production levels of both oil and gas. Depleting reserves and small discoveries have been a highlight of the E&P production landscape, which must be addressed by the sector and the government with policies and incentives to spur foreign as well as local investment.
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