Mari Petroleum discovers oil

KARACHI: Mari Petroleum Company Limited (MPCL) on Wednesday announced sizable crude oil discovery in its exploratory well Halini Deep-1 in Karak Block.

This is the third discovery in the said block after two discoveries earlier including Halini X-1 and Kalabagh-1A.

Subsequent to drill stem tests, the well flow comingled 1,425bpd of oil and 1.18mmcfd of gas.

MPCL is the operator of Karak Block with 60 percent working interest in it, while 40 percent of the working interest rests with MOL Pakistan.

Shahbaz Ashraf at Arif Habib Limited said assuming the crude oil price of $35/bbl the discovery of 1,425bpd of oil and 1.18mmcfd of gas may have an annualised earning impact of Rs3.24/share.

“Lower API gravity of the discovered crude oil compared to API gravity of Arab Light (benchmark), can lead to lower realised price per barrel when compared to Arab light.”

Fatiq Bin Khursheed at Optimus Capital management said at an assumption of $40/bbl crude oil, the discovery is estimated to carry an earnings impact of Rs6/share.

Fatiq said Halini Deep-1 exploratory well is located in close proximity to Halini X-1 producing well which experienced low pressure when its operations commenced on January 12.

“Artificial gas lift was installed to address the issue which increased oil output by nearly 400-500bpd. The well currently produces around 1,200bpd oil/condensate post installation of artificial gas lift against initial testing flows of 1,700bpd”.

Kalabagh-1A well faces similar issues and installation of artificial lift has failed to arrest the natural decline in production.

“We believe Halini Deep-1 is likely to encounter similar issues and installation of jet pump might be required to keep oil production from dropping,” Fatiq added.

The likelihood of approval of 2012 incremental gas price for Mari field has risen further with the agreement between federal and provincial governments to link Sui field pricing to 2012 policy, analysts believe.

Mari field remains the lowest priced field with respect to other large fields, and capacity to increase output strengthens the case further.  Philosophy of early production facility has been designed, and the first oil is expected by May 15, 2016.