Mari Petroleum Company Limited (MPCL), the supplier of gas to country's 90 percent fertiliser producers, is going to increase its production by around 150-200 million standard cubic feet per day (mmscfd) for government's allocation. MPCL's operated and non-operated production of natural gas and crude oil and condensate, respectively, rose 4.0 and 54 percent to 209,612 mmscf and 760,616 barrels (bbl) this year.
The military-run company plans to further boost its hydrocarbons output under a revamped growth strategy which, the company management says, would base on production enhancement instead of exploration.
"We revamped our growth strategy from 'exploration led growth' to 'production enhancement'," Muhammad Ayub, MPCL's regional manager Sindh, told Business Recorder.
Besides 25 mmscfd Sajawal Block, Ayub is managing Mari's operations at Dharaki which, the energy giant says, is Pakistan's second largest gas reservoir.
From the "shallow" and "deep" underground formations of Dharaki gasfields, at least 112 hydrocarbon wells of MPCL are producing about 650 mmscfd gas to cater the fuel requirement of industrial giants like Engro Fertilizers, Fauji Fertilizers, Fatima Fertilizers, Guddu Power Plant and Water and Power Development Authority.
"On March 8, we achieved a historic daily gas production here (at Dharaki field) of 655 mmscf," Ayub said.
Such efforts have a definite bearing on the company's operational performance as during first year, after the dismantling of Gas Price Agreement, MPCL's net sales rose 30 percent to Rs 19.37 billion from Rs 14.87 billion of preceding year.
Declaring Rs 51.25 Earning Per Share for its shareholders, the company contributed over Rs 73 billion to national exchequer as taxes, levies and duties out of its Rs88.8 billion revenue.
Mari's supplies, the manager said, was helping its customers make about 8000MT of fertiliser and 300 megawatts of electricity.
Explaining the new growth strategy, Ayub said instead of going for aggressive exploration in each block, his company had prioritised the blocks based on their prospectively. "We are carrying out exploration in the most promising blocks first," he said.
Also, MPCL is pursuing incremental production from existing blocks to avail pricing incentives announced in Petroleum Policy 2012.
The energy firm tends to capitalise on the government's recent approval of Mari D&P Lease conversion to Petroleum Policy 2012. The move entitled MPCL to all incentives under the policy including price incentive on incremental gas production from Mari gasfield on new exploration efforts in the area.
"This means that whatever we would produce from Mari over and above a certain benchmark, we would get an incremental price which would be significantly higher compared with existing Mari field price," said Ayub. The production of additional 150-200 mmscfd gas is part of the company's implementation of its incremental production plans.
"The revenue generation from incremental production would go a long way in setting off the present fall in international oil price and its adverse impact on the company's revenues and consequently its development and growth plans," said the regional manager.
Further, he said MPCL also was planning to bring on-stream significant new gas production by drilling wells in the deeper horizons of Mari D&P Lease area based on the processing and interpretation of recently-concluded carpet 3D seismic survey in Mari D&P Lease area.
"Mari Seismic Unit (MSU) has recently completed its maiden project by acquiring 1,079 square kilometres 3D data in Mari D&P Area," the official said.
Completed well ahead of its deadline thus saving Rs 1 billion for the company, the project is aimed at "exploring maximum gas from the deeper formation of Dharaki lease area".
MPCL had sent to an Egyptian firm the survey data for about 760 square kilometres for interpretation in first phase. "We have received the initial interpretation which is under evaluation. D3's potential is about 300 mmscf," the official said.
MSU crew has now been mobilised to Sujawal for acquisition of 410 sq kms 3D data, the contract of which has already been finalised.
About exploration, the MPCL official said to have recently made a significant discovery of oil, gas and condensate at exploratory well Kalabagh in Karak Block. Halini Deep-1 was another "deepest ever drilled" exploratory well having been drilled down to its target depth of 5,900 meters with MPCL's own Rig Mari-3.
"Global crude prices are expected to remain depressed in foreseeable future. We cannot control the oil prices, but what we can do is to keep improving our efficiency for enhancing production, curtailing operating costs and investing in low cost but attractive assets to remain well above the break-even point," said Ayub.