Oil, gas production continues downward trend on weak demand

KARACHI: The country’s oil and gas production declined by 14 per cent and 8.0 per cent year-on-year (YoY), respectively, in April of the current fiscal year, compared to the same month last year.

According to official data released on Monday, oil production settled at 58,890 barrels of oil per day (bopd), while gas output stood at 2,717 million cubic feet per day (mmcfd).On a cumulative basis, oil and gas production during the first 10 months of the current financial year fell by 11 per cent and 7.0 per cent YoY, respectively, averaging 63,543 bopd and 2,917 mmcfd.

“The decline stems from reduced output at major fields amid forced curtailment of production due to lower demand from gas consumers,” said Assistant Vice President of Research at Arif Habib Limited Muhammad Iqbal Jawaid while speaking to The News.

He noted that the curtailment of gas fields is partly due to the availability of imported RLNG from Qatar under long-term contracts. “There is already sufficient gas in the system, while demand remains subdued, which has led to reduced production,” he said.

However, he added that with electricity demand expected to rise in the summer months, gas demand is likely to pick up, which may lead to a rebound in production.Pakistan has been witnessing a sustained decline in oil and gas output for several years. The country’s oil production peaked at 98,519 bopd in November 2014, while gas production reached a high of 4,127 mmcfd in May 2008. Since then, a downward trend has persisted.

Recent data shows that oil and gas production declined by 11 per cent and 7.0 per cent YoY, respectively, during the first nine months of the current fiscal year. The contraction in hydrocarbon output is attributed to forced curtailments at the Nashpa and TAL blocks, alongside reduced gas demand. Major oil fields -- including Nashpa, Makori East, Pasakhi, Adhi, Chanda, Mardenkhel, Maramzai, Rajian and Umar -- saw a drop in production during July-March.

During the same nine-month period, a total of 15 exploratory wells and 23 appraisal/development wells were spudded -- falling short of the annual targets of 27 exploratory wells and 40 appraisal/development wells.