Yes, you heard it right. Pakistan has been exporting crude oil for some months now. And while there is nothing wrong with that, it sure sounds interesting especially considering that the country is energy deficient and meets a bulk of its need through imports. Starting in July 2014, crude oil exports seem to have a significant share in the total exports of the petroleum group that includes naphtha and other petroleum product exports. In 4MFY15, crude oil exports stood at 156,513 metric tons, which is equivalent to 1.32 million barrels of crude oil. In dollar terms, these exports have generated a foreign exchange of around $120 million in the first four months of FY15.
Include June 2014, and the number goes up to $177 million. Since June 2014, a total of 223,541 metric tons of crude oil has been exported so far according to Pakistan Bureau of Statistics, which is almost 1.9 million in barrels.
However, it appears that these stats have largely gone unnoticed as sector analysts and industry insiders seemed equally surprised when contacted by BR Research. From what BR Research could gather so far, these exports are largely the result of the government’s decision to resume exports to India, lifting the ten-year ban.
Crude oil production has significantly increased over a year and so. With the highest production of 98,000 bpd, crude oil production in the country jumped by 14 percent year-on-year in FY14 from 86,000 bpd due to some oil-rich areas like Tal block.
Some observers are questioning the sagacity of exporting crude saying that it should be refined by the country’s refineries instead. However, it has to be kept in mind that the crude oil being exported is ultra-light crude oil or condensate, according to sources. This, according to some experts, is difficult to process in most of the local refineries with hydro-skimming properties.
And while this is a phenomenon that needs to be investigated more, off-the-cuff remarks of other experts were that ‘the exportable crude oil is unlikely to constitute a big share of total local production’ – essentially implying that it may not make a business case for a local refinery to set up operations for this type of crude. Having said that, the verdict might still be out there, and BR Research would bring you more on this later as and when more information is available.
Comments
Comments are closed.