Oil & gas exploration firms in Pakistan may required to limit production

Exploration companies may be required to limit production of crude oil and natural gas following the closure of a second plant of Attock Refinery Limited (ARL).

Oil & gas exploration firms in Pakistan may required to limit productionARL shut its second unit of 5,000 barrels per day (bpd) because of less off take by the oil marketing companies (OMCs). ARL executive has required immediate involvement of the Petroleum Division for requesting to direct OMCs to lift locally produced petroleum products instead of giving priority to imported fuel.

Earlier, ARL closed one unit of 5,000 bpd and now it has closed the second plant of a similar refining limit. Supplies of rapid diesel (HSD) have accumulated after the refusal of OMCs to lift nearby oil based commodities.

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ARL’s operations are entirely based on locally produced crude oil as it lifts fuel from the local oil production companies. If the processing plant is closed, the whole energy chain may be disrupted and exploration companies may be forced to decrease production that would affect gas production as well. ARL’s operational capacity has been reduced to 62% due to the shutdown of the second plant.

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ARL Chief Executive Officer Adil Khattak wrote a letter to Petroleum Division director general oil for informed him about that they had no other choice except for closing another crude distillation unit of 5,000 bpd in order to deal with the critically high stocks of HSD.

He brought up that it would bring about further decrease of crude receipts from the exploration and production companies.

He said, ARL would be operating at 62% of its nameplate capacity with the closure of this unit. It might be noticed that this capacity running the refinery complex is difficult due to minimum throughput constraints.

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He said the matter was also highlighted by an ARL representative during a special meeting held under the chairmanship of additional petroleum secretary on March 16, 2020.

He added that we are carrying 14,000 tons of HSD stocks with outstanding ullage of hardly one day. We wish to inform you that inability of OMC for raising the product from ARL will ultimately lead to complete close of our refinery, which will result in disturbance of the supply chain of E&P companies and associated gas supplies, leading to serious implications for all concerned.

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