Latest news with #PakistanOilfieldsLimited
Business Recorder
4 days ago
- Business
- Business Recorder
Lower prices, gas glut weigh on POL's FY25
Pakistan Oilfields Limited (PSX: POL) had a slower FY25, with earnings dragged by softer oil prices, volume curtailments, and a spike in exploration spend. Profit after tax fell 38 percent year-on-year, even as gross margins stayed broadly resilient, highlighting how below-the-line items—chiefly exploration and lower treasury income—drove most of the damage. Net sales declined 13 percent year-on-year on weaker realized oil prices and modest volume pressure; gross margin for FY25 was 70percent, while the net margin compressed to 42.3 percent from ~60 percent last year. POL's operations in FY25 were hit by a surplus of gas in the country's network, which forced buyers to take less gas from its key fields in the Tal and Adhi blocks. With these curtailments cutting production and global oil prices averaging lower than last year, the company's quarterly revenues stayed under pressure.4QFY25 sales were down 18 percent year-on-year, reflecting double-digit declines in both oil and gas output and weaker realized prices. The biggest swing factor was exploration. POL booked Rs11 billion of exploration and prospecting expenses in FY25—about 6–7 times the prior year—largely due to a dry well recognized early in the year and higher seismic/geological spend across operated blocks. Finance costs rose and other income fell as market yields eased, further weighing on the bottom line. Despite these headwinds, operating costs for the full year declined, helping keep the gross margin intact. The E&P company announced a final dividend of Rs50 per share, taking the FY25 payout to Rs75 per share—still a double-digit yield even after the earnings drop. For FY26, three things will matter most for POL: first, how quickly the gas supply issues ease so production from fields can return to normal; second, where oil prices and the rupee-dollar rate go, since both directly affect revenues; and third, the results from upcoming exploration after the big spending in FY25. While analysts flag high reliance on the Tal and Adhi fields as risks, there could be upside from reserve updates other fields. With earnings now at a lower base, any boost in production or prices—along with steady exploration costs and normal taxes—could lift profits, and the strong dividend should continue to support investor returns.
Yahoo
01-07-2025
- Business
- Yahoo
New Energy Discovery Could Help Pakistan Cut Costly Fuel Imports
Pakistan Oilfields Limited (POL) and Oil and Gas Development Company Limited (OGDCL) have announced the successful completion of hydrocarbon production testing at the Makori Deep-03 Development Well in the TAL Block in Khyber Pakhtunkhwa. Drilling operations reached a final depth of 3,887 meters and yielded 2,112 barrels per day of condensate and 22.08 million standard cubic feet of gas per day (MMSCFD), according to a filing by POL. POL holds a 25% working interest in the block, while OGDCL has a 27.763% stake. Production is expected to commence within the next two months, pending completion of surface infrastructure. Earlier this year, Pakistan and Turkey signed a memorandum of understanding to jointly explore offshore opportunities in Pakistan's territorial waters. While specifics remain under wraps, the Petroleum Division framed the agreement as a platform for attracting foreign direct investment (FDI) and facilitating the transfer of upstream technologies. 'We believe that this strategic collaboration will bring much-needed FDI to Pakistan and pave the way for the sharing and deployment of international technologies, expertise and skillsets,' said the Ministry in a statement issued in April. The country's broader offshore potential has long been touted but remains largely untapped. Local media reports have described the recent discovery as one of the largest in the region, though these claims are not substantiated by international geological surveys. Former Oil and Gas Regulatory Authority (OGRA) member Muhammad Arif told Dawn TV that if the find turns out to be a gas reservoir, it could eventually displace costly LNG monetizing these resources will not come cheaply. Exploration alone could require upwards of $5 billion in investment. According to The Economic Times, Pakistan currently imports 85% of its crude oil, 29% of its natural gas, 50% of its LPG, and 20% of its coal. The country's energy import bill stood at $17.5 billion in 2023 and is projected to nearly double by 2030. Energy Minister Mohammad Ali recently estimated that an investment of $25 billion to $30 billion would be sufficient to extract just 10% of the country's estimated 235 trillion cubic feet (TCF) of gas over the next decade. Speaking to reporters in late 2024, Ali suggested that such a development could reverse Pakistan's declining domestic gas production and significantly reduce foreign exchange outflows. But foreign interest remains tepid. A 2023 auction for 18 onshore and offshore oil and gas blocks failed to attract significant international participation. Around the same time, Shell Plc announced it would exit the country, agreeing to sell its Pakistan business to Saudi Aramco as part of a broader restructuring of its global downstream portfolio. Security risks have also complicated Pakistan's energy investment outlook. In March 2024, five Chinese engineers were killed in a suicide attack while working on the Dasu hydropower project in northern Pakistan. Insurgents from the Balochistan Liberation Army (BLA) also stormed the Gwadar Port Authority complex, targeting Chinese interests in the southwest. The attacks led to the temporary suspension of several projects under the China–Pakistan Economic Corridor (CPEC), Beijing's flagship $62 billion infrastructure initiative in the country. Launched in 2015 as part of China's Belt and Road Initiative, CPEC has poured an estimated $25.4 billion into Pakistan. Its power projects have added around 6,000 megawatts to the national grid and expanded the transmission network by roughly 1,000 kilometers, according to the Pakistan Planning Commission. CPEC has also financed the construction of approximately 500 kilometers of highways, a notable achievement for a country grappling with chronic infrastructure shortfalls. Yet the returns have fallen short of expectations. Pakistan's external debt has ballooned to $100 billion, with roughly one-third owed to China. The country is navigating a severe balance of payments crisis, dwindling foreign exchange reserves, and surging inflation that now approaches 30%. Food prices have risen by more than 40%, and nearly 45% of Pakistan's 250 million citizens live below the poverty line, according to World Bank estimates. In this context, the discovery at Makori Deep-03 is a promising development. However, converting potential into production will demand capital, security guarantees, and political stability, all of which remain in short supply. By Alex Kimani for More Top Reads From this article on Sign in to access your portfolio
Business Recorder
28-06-2025
- Business
- Business Recorder
Significant hydrocarbon discovered in Karak
KARACHI: A significant new hydrocarbon discovery has been announced in the country, following the successful testing of the Makori Deep-3 Development Well located within the TAL Joint Venture (JV) in the Karak District, Khyber Pakhtunkhwa Province. The well is operated by MOL Pakistan. Drilling operations for the Makori Deep-3 Well began on December 12, 2024, and reached a final depth of 3,887 meters. Upon completion, the well demonstrated substantial flow rates from the Lockhart Formation, yielding 22.08 million standard cubic feet of gas per day (MMSCFD) and 2,112 barrels per day of condensate. The well also produced 15 barrels per day of formation water, tested on a fixed choke at a flowing wellhead pressure of 4,744 psi. Both major Pakistani oil and gas entities, Oil and Gas Development Company Limited (OGDCL) and Pakistan Oilfields Limited (POL), have confirmed their respective working interests in the discovery. OGDCL holds a 27.763 percent working interest in the development phase of this Block. On the other hand, Pakistan Oilfields Limited (POL) holds a 25 percent pre-commerciality working interest in the TAL Block. This successful testing of Makori Deep-3 is anticipated to significantly bolster Pakistan's energy reserves and contribute to the nation's energy security. Pakistan Oilfields Limited expects the well to be connected to the production line within two months. The information was submitted in compliance with Section 96 of the Securities Act, 2015, and Clause 5.6.1 of the Pakistan Stock Exchange Limited Regulations, for dissemination among their members. Both companies officially communicated the discovery to the Pakistan Stock Exchange Limited, with copies also sent to the Securities & Exchange Commission of Pakistan. Copyright Business Recorder, 2025
Business Recorder
15-05-2025
- Business
- Business Recorder
POL in 9MFY25
Pakistan Oilfields Limited (PSX: POL) reported a substantial decline in profitability for the nine months ended March 31, 2025, reflecting broader challenges facing the upstream oil and gas sector. The company posted a profit after tax decline of 44 percent in 9MFY25. The primary drag on earnings was the recognition of over Rs7 billion in exploration expenses related to the unsuccessful well, coupled with lower hydrocarbon sales volumes and a drop in average realized oil prices. Net sales declined 11 percent year-on-year in 9MFY25 as both crude oil and gas production fell by 6.4 percent and 12.2 percent, respectively. Increased pipeline pressures from the gas distribution company and subdued demand contributed to these lower production figures. The financial performance in the 3QFY25 also mirrored this downward trend. POL recorded a quarterly profit decline of 47 percent year-on-year. Revenues during the quarter fell by11 percent year-on-year, driven by an 8 percent fall in oil production and an 18 percent drop in gas output. These operational setbacks were compounded by a 28 percent decline in other income, which fell by 28 percent year-on-year in 3QFY25 due to reduced interest earnings amid declining policy rates and lower investment yields. Exploration costs surged to over a billion rupees during the quarter, nearly 4.5 times higher than the same period last year, reflecting intensified geological and seismic activity. Despite the earnings pressure, POL maintained strong operational momentum in its exploration and development activities. Drilling continued across key assets, while the company also continued to process seismic data across a wide range of fields and secured new acreage in the Sindh region. At the sectoral level, POL's performance reflects the broader dynamics in Pakistan's E&P industry, where oil and gas production contracted by 11 and 7 percent respectively in 9MFY25. Nonetheless, a recovery appears to be taking shape, fuelled by recent gas price rationalizations, improved receivables, and renewed government focus. Although the company's financial performance was underwhelming, its continued investment in new reserves, coupled with a healthy liquidity buffer of over Rs100 billion, positions it well to benefit from a potential upturn in the E&P cycle.
