KARACHI: As far as exploration and production (E&P) sector is concerned, 2014 will be the year of renewed focus on exploration activity in zones I and II while the incentives offered in the new E&P Policy 2012 and low British thermal unit (BTU) gas policy will spur activity in the country, said an analyst.
KASB Scurrilities’ analyst said in a report on Thursday that oil and gas stocks yielded solid results in 2013, and while we enter 2014 with some concerns over oil prices, there are enough stock-specific catalysts to keep the bears away. In terms of exploration activities, 2013 turned out to be a dull year for E&P companies. Tal block exploration drilling continued its successful journey (Makori East III), while overall exploration activity remained dull.
In terms of stock performance, Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL) underperformed by 5.0 percent and 4.0 percent, respectively, in complete year (although posting a very decent return on a standalone basis as the market rose by a whopping 49 percent), while Pakistan Oilfields (POL) underperformed by a margin of 35 percent. The analyst believed three key themes will play out in 2014 such as exploration activity picking up in zones I and II, timely completion of key development projects and shale oil and gas policy.
Pakistan is an energy deficit country and around 27 percent of total energy requirements are being met through imports, with demand expected to grow substantially in coming years. Low BTU gas policy will spur activity in the country, as it meets demand for higher realised prices for both oil and gas by exploration companies, said the analyst.
The government will also focus on timely delivery of development timelines on existing as well as newly discovered fields. Some of the projects were redesigned for early production (KPD, Sinjhoro, Mela, Naspha, Uch, Sara West, Tal, Zin and Jhal Magsi), while work on other projects accelerated. According to the US Energy Information Administration (EIA) report, Pakistan was estimated to have fresh recoverable shale gas reserves of 105 trillion cubic feet and more than 9.0 billion barrels of oil. The government has started to work on shale gas policy and is conducting studies to evaluate the full potential of the shale oil and gas reserves. The analyst believed an attractive policy will be announced this year so that full throttle exploration could start by the fourth quarter of 2014, the analyst added.
TOKYO - The dollar edged down against other major currencies on Friday as investors adjusted their ...