ISLAMABAD: Pakistan has made a noteworthy discovery of new oil and gas reserves in the northern region, specifically in the Attock District of Punjab. This discovery is poised to slightly alleviate the country’s heavy dependence on energy imports and conserve valuable foreign exchange reserves.
On Monday, Pakistan Oilfields Limited (POL) reported the discovery of 714 barrels of crude oil per day and 10.2 million cubic feet per day (mmcfd) of gas from the Jhandial-03 well in the Ikhlas Block. This find constitutes approximately 1% of the nation’s total oil production and 0.3% of its domestic gas output.
Recent weekly production data indicates that Pakistan’s crude oil production was 68,248 barrels per day, while gas production was 3,146 mmcfd for the week ending June 23, 2024. POL provided various production estimates for the Jhandial-03 well, with a crude oil flow range of 701-767 barrels per day and a gas flow range of 7.4-10.2 mmcfd. The well is anticipated to be connected to the production line within three weeks.
POL holds an 80% working interest in the Ikhlas Block, with the remaining 20% held by the Attock Oil Company (AOC). Drilling for the Jhandial-03 well commenced in October 2023, reaching a depth of 17,778 feet in the Lockhart Formation. Topline Research projects that this new hydrocarbon discovery could boost POL’s annual earnings by around Rs10 per share, or 7%, for the fiscal year 2025. Following the discovery, POL’s share price surged by 4.30%, closing at Rs540.70 per share on the Pakistan Stock Exchange (PSX) on Monday.
Despite this new discovery, POL’s latest financial report for the nine-month period ending March 31, 2024, showed a 5% decline in crude oil production, down to 1.33 million barrels from 1.40 million barrels during the same period the previous year. This translates to an average of 4,855 barrels per day for the nine-month period. Similarly, gas output decreased by nearly 2% to 17,576 million cubic feet, translating to an average of 63.91 million cubic feet per day.
Energy experts highlight that Pakistan relies on imports for nearly 70% of its total energy requirements, with local production meeting only 30% of national needs. Energy imports accounted for over one-fourth ($15.34 billion) of the total $49.85 billion in imports for the first 11 months of the previous fiscal year, as reported by the Pakistan Bureau of Statistics (PBS). To address this imbalance, the government has introduced a policy for tight oil and gas discoveries, offering a 40% higher tariff on these hydrocarbons compared to conventional ones. This policy is intended to stimulate local production and significantly reduce imports.
The discovery of new oil and gas reserves in the Attock District represents a significant development for Pakistan’s energy sector. While it only modestly contributes to the country’s overall energy needs, it marks an important step towards reducing reliance on energy imports and enhancing local production capabilities.
