Oil production down by 35 percent in lockdown

The oil production has declined by 35 percent during the first two weeks of lockdown in the country, experts said.

The gas production has decreased by 17 percent during this period from March 23 to April 7, they added.

Amidst lower intake of crude by refineries, the oil production in the country during the third quarter of FY20 is likely to record a fall of 10 percent on year-on-year basis, Shankar Talreja at Topline Securities said. This is largely due to fall in demand owing to country wide lockdown amidst Covid-19 outbreak and supply chain disruptions like unavailability of bowsers etc, he added.

During the first nine months of FY20, oil production is likely to decline by 9.4 percent YoY to 22.3 million barrels.

Gas production during the same period is likely to contract by 5 percent on YoY due to their association with oil production, closure of Sindh based industries and lower demand by energy sector mainly Gencos. During the first nine months of FY20, gas production is likely to come down by 7 percent on YoY to 3.67k mmcfd.

During the third quarter of FY19, Oil and Gas exploration companies managed to arrest the natural depletion in production of 4-5 percent through induction of new development wells in Adhi and Mardankhel fields, both of which resulted in incremental production of 234000 barrels YoY or 2.8 percent of the total Pakistan oil production. However during the third quarter of FY20 Geological and Geophysical activities showed a decline, with 3D seismic acquisition falling by 46 percent on YoY and 6 percent on QoQ to 312 Sq. Kms, while 2D increased multifold on a YoY basis (though flat on a QoQ basis). Drilling activities (meterage) also fell by 34 percent on YoY. On the nine month basis, meterage drilling declined by 25 percent on YoY as the numbers of well spudded till March-2020 (FYTD) remained 42 against 74 in the same period last year.

During the third quarter of FY20, the Oil & Gas companies encountered four dry wells, wherein two were Exploratory (Rangunwari and Katiar) and two were Developmental/Appraisal wells (Nashpa 5A and Mulaki 5).