Oil, gas production sharply falls on virus lockdown

KARACHI: Oil and gas production registered double-digit decline during the week ended on April 7, 2020 as coronavirus lockdown continued to hurt economic activities and hamstring supply lines, a brokerage reported.

BMA Capital said oil and gas production continued to decline in the first week of April 2020 with oil and gas production of 55,000 barrels per day (bpd) and 2.9 billion metric cubic feet per day (bcfd), respectively.

“Oil production for the week neared average production of FY99-00,” it added.

Gas production fell three percent to 2.9 bcfd. That was compared with 3 bcfd a week earlier. MOL received the biggest decrease of half of its gas production from 271 mmcfd to 135 mmcfd, followed by POGC (28pc), ENI Pak (4pc), OMV (2pc) and OPPL (1pc). However, OGDC, PPL, POL, MARI, OPL, PEL, and UEPL registered increase in gas production, according to BMA Capital.

Oil production was also down 15 percent to 55,000 bpd. That was compared with 64,431 bpd a week earlier. MOL witnesses the largest drop of 55 percent to 5,937 bpd, followed by PPL (25pc), ENI Pak (4pc), OMV (3pc), OGDC (2pc), Dewan and OPPL (1 percent each). However, POL and UEPL registered increase in production.

Analyst Shankar Talreja at Topline Research said the country’s oil reserves remained unchanged as of Dec-2019 from Jun 2019 levels despite production of 14.2mn barrels of crude oil (2.5 percent of reserves) during this period.

Oil reserves witnessed addition of a new well Savi Ragha having reserves of 1.35 million barrels (though discovered in 1994) and an upward revision in Makhdumpur Deep reserves (operated by UEPL) by 14 million barrels.

“Fall in reserves of major fields like Nashpa, Adhi, Mardankhel, and Maramzai was broadly in line with their respective production rates,” Talreja said. “However, Makori Deep reserves have been revised down by over 50 percent.”

Remaining life of the oil reserves of the country is expected at around 20 years, wherein the country’s three largest producing fields, Nashpa, Makori East, and Adhi have remaining weighted average life of 6.4 years.

Gas reserves in the last six months have declined three percent to 20.9 trillion cubic feet as of December 2019. Two new small fields Unarpur (operated by UEPL) and Bitro (operated by UEP) were inducted in the system.

Reserves for major fields like MARI, Uch, Qadirpur, Sui and Kandhkot were down in line with production rates. However, Tolanj West and Makori East witnessed declines of 10-30 percent. “Average remaining life of the country’s gas reserves is at around 14 years.”