Karachi, The Oil and Gas Development Company (OGDC) conducted an analyst briefing today to discuss its fiscal year 2023 results and future plans. Key highlights included significant milestones in the Bettani field, seismic survey achievements, and strategies to address production challenges and optimize assets.
According to AKD Research, OGDC’s notable achievements in FY23 included the progress in the Bettani field, with the Bettani well producing 880 barrels per day (bpd) of oil and 12.5 million cubic feet per day (mmcfd) of gas. The company is currently working on two additional wells in this field – the appraisal of Bettani-1 and Bettani Deep – with drilling expected to commence by December 2023 and production anticipated to start after 6-8 months. However, the complex formation of the Bettani field makes the process time-consuming and capital-intensive.
In seismic activities, OGDC conducted 1.8k and 0.76k square kilometers of 2D and 3D surveys, respectively, accounting for 55% and 39% of the total industry’s share. The company drilled 10 wells during the outgoing period, with a success ratio of 1:2.65, surpassing the industry average. The gas receipt collection ratio for the company stood at 86% during the first quarter of FY24, and the recent gas price increase is expected to improve cash receipts by the third quarter of FY24.
Regarding capital expenditures (capex), OGDC’s spending remained low in the previous year due to reduced drilling activities, primarily attributed to issues related to importing and letters of credit (LC). The company has set a capex target of US$150 million for FY24, mainly for the Uch and KPD-TAY projects, expecting to add 2,000 to 10,000 bpd over the next five years through optimization efforts.
The company is also addressing the substantial decline in Nashpa’s production by pursuing additional wells, specifically Nashpa-11 and 12, and implementing workover jobs and side-tracking activities. Regarding the Gas Sale Agreement (GSA) of Mamikhel South’s gas towards a third party, the pricing agreement remains confidential.
Furthermore, OGDC mentioned a recently signed Memorandum of Understanding for a Greenfield refinery (300kbpd) with partners including PPL, PSO, GHPL, and Aramco. The management stated that it is too early to disclose project costs as the feasibility study has not yet been completed, with project financing expected to be a mix of debt and equity.
The company also outlined plans to develop currently un-monetized assets, including the Jhal Magsi and Zin block, along with other fields. The average cost for rig and allied equipment currently stands at US$35,000 to 45,000 per day.
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