Drilling activities remain low in Balochistan and Khyber Pakhtunkhwa

The search of new hydrocarbon reservoirs and drilling activities remained low in the country during the first half of current fiscal year of FY12 due to circular debt issue and challenged security situation particularly in KP and Balochistan. Only 6 exploratory wells were spudded during the first half of FY12 similar to that of last year.
Nauman Khan, an analyst at Topline Securities said that the circular debt and challenged security situation particularly in KPK and Balochistan continue to bode ill on the sector's exploration programme while some carry-over wells were also completed. During this period, E&P companies continue to focus on maximum utilisation of their existing reservoirs, spudding 15 development/appraisal wells, a notch above 13 wells drilled in comparable period last year, he added.
Pakistan Oilfields (POL) and Oil and Gas Development (OGDC) during the first half of FY12 drilled one exploratory well each while Pakistan Petroleum (PPL) has yet to spud for new reserves. During the first half of FY12, sector spudded a total of 22 E&D wells accomplishing only 29 percent of the full year target of 76 wells. In the same period of the last year, the sector drilled 23 percent of its target of 80 wells. The activity continued to be skewed towards development activities, with 15 development wells as against full year target of 45, while only 7 exploratory wells were drilled versus FY12 target of 31 wells, he said.
Nauman said that the listed sector has remained muted in their own operating lease with major dependency on their JV partners. POL spudded 1 exploratory well and no development well, while PPL was on the other end of spectrum, with company drilling 1 development well and no exploratory well. OGDC has recently started working on their 1st exploratory well of the year, while have spudded 6 development wells.
Amongst the last year carried over wells, major of them have concluded with not so encouraging results. It yielded only one discovery in the Zin block, with that also falling short of industry's expectation. The major excitement of the year has come from discovery of augment reservoir size from Tal and Naspha block, with PPL and POL standing at prime beneficiaries.