Spokesman says company still making profit, decline in production, exploration activities due to security situation, litigations
Friday, January 01, 2010
By Aftab Maken
ISLAMABAD: The Oil and Gas Development Company (OGDC) failed to meet its production targets set in its business plan for 2008-09 due to lack of vision and the policy of granting millions of dollars worth of projects to hand-picked companies, officials of the company confided to The News.
Documents made available to this correspondent reveal that OGDC’s oil and gas production has been shrinking for the last two years. The documents clearly say that in 2008-09 OGDC’s oil production fell from 54,000 barrels to below 41,500 barrels and gas from 1,150 million cubic feet per day to 900 mmcfd.
The documents indicate that against the target of 52 wells set in the business plan, the OGDC could drill only 32 wells.
A spokesman for the OGDC, Basharat Mirza, told The News “Yes, the company recorded a reduction in production and exploration mainly attributed to two reasons, law and order situation and that the company is in litigation with a number of companies operating in the country.”
To a question about fixing responsibility of failure to achieve OGDC’s business plan for 2008-09, the spokesman avoided straight answer by saying, the company is earning profit and it is doing well under the current management.
To other queries regarding OGDC’s poor performance, the spokesman provided “Un-audited financial results for 2008-09” that showed that the company registered a decline in crude oil and LPG production. However, its operational performance together with high-realised prices in rupee terms led to the delivery of improved financial results.
It also failed to add another 434 mmcfd gas in its total of 904 mmcfd gas to 1000 mmcfd per day. It also missed the target of enhancing oil production from 41,500 to 46,000 a day by June 2009. The same disappointing trend for oil and gas production is continuing for the first half of the current fiscal year, it added.
The OGDC leadership has no strategy to utilize the available resources for a quick turnaround of the company to explore Pakistan’s natural carbon resources, said another document of the company and available with The News.
The management has entered shady deals for procurement in a number of development projects like Qadirpur compression project, it pinpointed.
The company also wasted precious time by delaying decisions for executing of at least five major projects-Songoro development project, Kunar Pasaki deep (KPD), Uch -II development project, Dakhni expansion project and Qadirpur compression project. These projects are awaiting execution for the last three to four years, it said.
The technical reports of the company itself indicate that timely completion of these major projects could add at least 434 mmcfd gas per day to the system, besides increasing another 55 to 60 thousand barrels of crude oil and 500 materic tons LPG in domestic production.
Another 434 mmcfd gas production could help the government avoid gas load shedding during the winter season besides increasing the company income by 500 million dollars a year. The record of the company shows that the management could not install any new project during the last two years to increase drilling activities and seismic survey to enhance oil and gas production, the official document said.
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