Oil output expected to rise to 40m barrels next year

 Oil output expected to rise to 40m barrels next year

 

The government has set the production target for crude oil at 40 million barrels for the next financial year, an increase of 12% over the goal for the outgoing year.

This year, the target is 35.62 million barrels and actual production is likely to be 35 million barrels by the end of the year on June 30, which is 98% of the output the government expected to achieve.

In 2014-15, maximum crude oil production per day is 100,000 barrels per day and the government plans to increase it to 110,000 barrels per day in the next financial year, beginning July.

For gas production, the target has been set at 1.5 trillion cubic feet for the next financial year, which is only 2% higher than the target of 1.470 trillion cubic feet for the outgoing year. Actual output this year is expected to be 1.460 trillion cubic feet, hitting 99.32% of the goal.

Oil and gas exploration companies are planning to drill 126 wells to meet the target for the next year.

According to the Annual Plan 2015-16, next year the demand is projected to stand at 23 million tons of oil (473,000 barrels per day) and 2.1 trillion cubic feet of gas (six billion cubic feet per day).

Keeping in view the expected supply of domestically produced oil at only 110,000 barrels per day and 1.5 trillion cubic feet of gas, the gap between supply and demand is required to be met through imports.

About 18 to 19 million tons of crude oil and petroleum products will be imported while domestic gas supply will be supported through import of 400 million cubic feet of liquefied natural gas (LNG) per day. This will result in bridging to some extent the gap of over two billion cubic feet of gas per day.

A positive feature for the energy sector in the past one year had been a sharp decline in international crude prices, which triggered a 29% fall in domestic petroleum product prices. With this, costs of transport and electricity generation have also gone down.

In an effort to enhance the exploration and production of oil and gas, a study on shale oil and gas deposits is being conducted with financial assistance of the US Agency for International Development (USAID) and it is expected to be completed by the end of 2015.

The study will give an assessment and allied aspects of shale oil and gas resources in the country, paving the way for development of a comprehensive and investment-friendly shale oil and gas policy.

In order to extend their network in 2014-15, gas utilities – Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) – laid 6,799 km of new transmission and distribution pipelines to provide gas to 418,410 new consumers.

Next year, they plan to add a further 419,430 consumers by laying 7,332 km of new transmission and distribution pipelines.

Published in The Express Tribune, June 9^th, 2015.

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