Oil and gas production witnessed decline during the second quarter of FY18 as indicated by Pakistan Petroleum Information Service (PPIS) data. During the quarter, oil production declined by 2.5 percent on year-on-year basis to 89,662bpd. Lower crude oil offtake can broadly be attributable to lower production in December 2017 from Nashpa, Makori East, Makori Deep and Mardankhel fields in the aftermath of lower Furnace Oil (FO) based power generation and restrictions imposed by the government.
"This problem is likely to be resolved soon as the government has reiterated its resolve to ensure full utilization of local hydrocarbon resources", Faizan Ahmed at JS Global Capital said. However, the timing of this remains uncertain for the time being which may lead to weak production levels in the next month as well.
Meanwhile, oil price recovery (Arab Light average up 19 percent on quarter-on-quarter basis to $60/bbl in the second quarter of FY18) will be a major profitability protector during the quarter. Gas production also witnessed decline of 2.8 percent on year-on-year basis to 3,951mmcfd, while LPG production changed by 1.7 percent on year-on-year basis while declined by 4.5 percent on quarter-on-quarter basis to 1,878tpd.
Lower gas offtake was majorly because of the aforementioned reason (lower crude oil offtake leading to lower gas offtake of above-mentioned fields), lower production from Kandhkot field (mainly because of lower offtake from Guddu Power Station) and natural gas production decline from other fields, Faizan said.
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