6/10/2014 Outlook: Oil production set to reach record 130,000 bpd The Express Tribune

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Outlook: Oil production set to reach record 130,000 bpd
Industry players confident of output boost in one or two years.
By Saad Hasan
Publ i shed: March 9, 2014
Pakistans crude oil output is expected to increase to 130,000 barrels per day in one or two
years, a sharp rise from the stagnant 66,000 bpd seen in the last few years, industry players told The
Express Tribune.
It has already risen to all-time high of 91 ,000 bpd in recent weeks, according to latest Pakistan Petroleum Institute
(PPIS) statistics. That comes months after the highest lev el of 84,650 bpd was achiev ed.
Av erage oil production was at 81 ,000 bpd in 201 3, up 1 3% ov er the prev ious y ear with most of the increase
coming from the wells located in Khy ber-Pakthunkhwa, especially the Tal Block.
We were actually expecting production to rise to 1 00,000 bpd in 201 3, said Masood Siddiqui, a petroleum
industry v eteran who headed Oil and Gas Dev elopment Company Limited (OGDCL) till a few months back.
If the work continues like it is right now, then we should be able to achiev e the target of 1 30,000 to 1 40,000 bpd
in a short time, he said.
In other words, Pakistans annual oil production stands at around 4 million tons. That is a little less than what is
imported ev ery y ear to meet demand. In fiscal 201 2-1 3, Islamabad spent $5.392 billion to import 6.939 million
tons.
During the sev en-month (July -June) period of current fiscal 201 3-1 4, 4.22 million tons hav e been imported
against $3.3 billion, according to Pakistan Bureau of Statistics.
The 1 30,000 bpd lev el appears v ery much reachable because of the substantial rise in drilling activ ity , Siddiqui
said. Around 7 6 wells were drilled last y ear alone. We hav e nev er seen work on so many wells being done in one
y ear.
While there remains uncertainty ov er the exact size of oil reserv es in absence of any broad geological surv ey ,
Pakistan has estimated recov erable reserv es of 27 million barrels, according to the last Economic Surv ey .
Petroleum industry generally believ es Pakistans geology is gas-prone rather than hav ing any substantial oil
potential. The fact that companies hav e to drill deep wells to find hy drocarbon reserv es adds credence to this
argument.
6/10/2014 Outlook: Oil production set to reach record 130,000 bpd The Express Tribune
http://tribune.com.pk/story/680591/outlook-oil-production-set-to-reach-record-130000-bpd/?print=true 2/2
The wells at Makori field hav e a depth of around 1 2,000 feet.
Howev er, Siddiqui points out lack of experience as another reason behind this v iew. You hav e to remember that
our geoscientists and geologists hav e been mostly trained to study gas structures since Sui field was discov ered 50
y ears back.
But the perception is changing. Ten y ears back, experts would hav e laughed at us if we would hav e asked them to
find oil in K-P from where all the production is coming now.
Higher oil production has also added to profitability of petroleum upstream companies, say s Vahaj Ahmed, analy st
at Topline Securities. The realised price of oil is six-and-a-half times more than what these companies get for gas.
The av erage price of gas in Pakistan is $1 2.5 per barrels of oil equiv alent (BOE) against oils $85 per BOE.
Despite the seemingly high return on finding and producing oil, the companies take cautious approach because of
the huge capital expenditure, Ahmed said.
Higher oil production does not mean it will help the balance of trade substantially since the country spends a lot to
import petroleum products like diesel and furnace oil as well.
Published in The Express Tribune, March 9
th
, 2014.
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