Gas production by the country’s third largest exploration and production Company has hit a snag, but the promising oil flows have been able to keep Pakistan Petroleum Limited (PPL) buoyant. Despite the deteriorating gas production, once a major in the company’s sales mix, first half of FY13 ended on a positive note.
Sales mix for PPL is shifting to oil, and the performance of the Company during 1HFY13 mostly banks on the same. The top line of the Company grew by a moderate 16 percent year-on-year. This increase was propelled by an approximate 19-20 percent increase in oil production primarily from the non-operated fields of PPL.
Like 1QFY13, Nashpa played a major role in pushing up oil flows during 2QFY13 on the production front, contributing profoundly to the sales growth as gas flows remained stunted. Other contenders for a boost to the total oil production include the Tal Block and Adhi field. Moreover, the depreciation of rupee further helped oil sales.
Some relief to the gas production came with better hydrocarbon prices. Gas production weakened during 1QFY13 by nine percent YoY due to strained production flows from Sui, Sawan and Kandhkot.
Signing off on a buoyant note, the bottom line took the hint from the accretion in the top line and expanded by 11 percent YoY during 1HFY13. Besides sales, reduced other operating expenses and better cash and investment position also supported the bottom line during the first half of FY13.
The revenues and profits might not be whopping as of now with the secondary offering looming over, but the Company has its hopes pinned to the combo of expected increase in gas well head prices and incremental volumes from Makori East and Nashpa joint ventures.
These will act as triggers to the Company’s growth plans concerning the acquisition of MND Pakistan, the interest shown in Tullow, development of the block acquired in Iraq, and the acquisition of a field in Bangladesh.
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