E&P sector profits grow by 43.4pc

KARACHI: The country’s exploration and petroleum (E&P) sector posted a massive surge of 43.4 percent in its profitability, reaching Rs27.1 billion during the quarter ended on September 30, data compiled by InvestCap revealed on Saturday.

The listed E&P sector revenues increased by a significant 33 percent to Rs64.5 billion, primarily on account of favourable prices and volumetric growth.

On the price front, prevailing concerns over global economic recovery and consistent demand from the emerging economies translated into strengthening of metals, currencies and commodities during the period, it said.
This also resulted in Arab Light crude oil prices going up by 7.1 percent to an average around $74 per barrel, while augmenting further in the rupee terms by four percent.

The rise in the crude oil prices also reflected positively on the companies’ gas wellhead prices.


On the production front, listed E&P sector’s oil and gas production increased by 2.5 percent and three percent respectively, primarily benefiting from surge in production from Tal Block fields, Manazalai and Makrori, which has mitigated the decline in production from other major fields, it said.

In addition, new start-ups such as Naspha, Bela and Adam also played their due role in compensating for the decline in production from other fields.

POL’s revenues chiefly benefiting from the abovementioned scenario grew by 68.8 percent, followed by Pakistan Petroleum Limited (PPL) growing by 49.5 percent, Oil and Gas Development Company (OGDC) and Mari’s revenues also jumped up by 24 percent and 24.8 percent, respectively.

The sector’s operating expense also witnessed a massive increase of 37.7 percent on account of the rupee depreciation against the greenback, volumetric variance and inflationary pressures as the exploration programme tends to remain muted during the quarter.

Overall, the sector’s profitability increased by a massive 43.4 percent to Rs27.10 billion with POL and PPL being the chief contributorsPOL and PPL profits grew by

a solid 56.6 percent each to Rs2.3 billion and Rs7.8 billion, respectively during the period under review.
OGDC profits boosted by 38.5 percent and Mari’s remained the only company that posted a decline of 14.2 percent in its profits.

Positive developments on the pricing front, production enhancement from Tal and Naspha Block, and recovery in production from the flood-affected fields would bode well for the E&P profitability, said Nauman Khan, an analyst at Invest Capital.