Is lower for longer era for the crude oil prices over yet? Crude oil is showing strength as it inches close to $60 per barrel. But will it move up further? Some global analysts are betting that $80 oil could be just around the corner, while others have more a conservative stance. Some are saying that the oil market is rebalancing, while others believe that the rally in price is solely due to geopolitical tensions between Iraq and Turkey, and North Korea and the USA.
Whatever the reasons are for the recent up tick in oil prices, the recovery is much welcomed by the oil and gas exploration and production sector. And while Pakistan imports most of it oil requirement making it not such good news, the jubilance is the same in the domestic E&P sector.
The low price era serves as a basis of growth for the E&P companies as they invested in some key drilling and exploration. Post the oil price crash, the local E&P invested in carrying geological survey, acquiring seismic data along with fast-track exploration plans due to lower costs. Now with sector drivers back in action, it’s time to reap the benefits, which would accrue as higher hydrocarbon production.
According to a research note by AKD Securities, the local E&P sector has planned a total of 100 new wells for FY18, which lights up the chances of achieving a target of 100kbpd of oil - the highest daily production of crude oil after around 95kbpd recorded in FY15. Highlight of the aggressive drilling and exploration is also the fact that the E&P giants like PPL and OGDCL have ramped up their efforts in Balochistan and KPK fields that were previously untouched due to security threats. Improvement of security concerns has been a key driver in the positive activities in these regions.
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