LAHORE: The country’s E&P sector has witnessed 10 per cent increase in oil production in fiscal year 2015 as compared to historical 5-year (FY10-14) growth of 6 per cent.
However, gas production decreased by 2% versus historical 5-year (FY10-14) average growth of 1%. The main companies include Pakistan Oilfields (POL), Pakistan Petroleum (PPL) and Oil & Gas Development Company (OGDC). Experts expect sector’s oil production to grow at 5% (Topline universe growth 7%) in FY16 and 4% (Topline universe growth 4%) in FY17, while gas production will decline by 3% in FY16 followed by 2% growth in FY17. The growth in oil production is attributable to additions from Mardankhel, Makori East and Tando Allah Yar (TAY). On the other hand, fall in gas production is due to declining production from Sui and Qadirpur.
The most recent poll (Jun 01, 2015) on oil prices suggests that Brent crude will average US$70.9/bbl in 2016 and US$75.9/bbl in 2017. Following historical parity with Brent crude, Arab Light crude (reference crude basket for E&Ps in Pakistan) will average US$68.0/bbl in 2016 & US$71.5/bbl in 2017. Due to improving oil volumes and some recovery in oil prices, oil sales of Pakistan E&P sector are expected to grow 3% in FY16 and 12% in FY17. Gas sales of the sector will decline 8% in FY16, followed by a 9% increase in FY17. As a result, total sales of the industry will be down by 3%in FY16, followed by 10% growth in FY17.
