KARACHI: Oil and Gas Development Company Limited (OGDCL), Pakistan’s biggest oil exploration company by investment as well as the area under exploration has said that so far no loss to values of assets and liabilities have been reported due to COVID-19 pandemic slowdown in demand from refiners.
The company in a review with the quarterly financial statement said the during the year ended June 20, 2020, the World Health Organization (WHO) declared the outbreak of the novel strain of coronavirus a global pandemic and recommended containment and mitigation measures worldwide.
Oil production from the major operated and non-operated fields declined from March 2020 onwards as a result of reduced oil demand from refineries on the back of depressed demand in the country.
The federal and provincial governments of Pakistan also took various measures, including imposition of lockdown, from the end of March 2020 to contain the spread of COVID-19. This caused an overall economic slowdown and varying degree of disruption to various businesses including oil and gas, resulting in temporary decline in the sale of hydrocarbons.
Globally oil prices dropped drastically in April 2020, however, recovery has been witnessed with the oil prices now gradually
increasing and are expected to further improve as the global demand picks up with an improvement in the COVID-19 situation.
Based on management’s assessment there is no material impact on the carrying values of assets and liabilities as of March 31,2021. From the very outset of Covid-19, the management has adopted various policies and practices to
minimize adverse impact of Covid-19 on the business and is continuously monitoring the situation in order to proactively address any challenges which may arise from Covid-19.
OGDC statement also said that during the period under review, international crude oil prices rallied on the back of uptick in
economic activities, extended production cuts by OPEC+ group and rollout of vaccines across the globe. However, recovery in oil prices and demand remains fragile owing to COVID-19 resurgence coupled with renewed lock downs in key oil consumer regions. Amidst such uncertain times, OGDCL remained steadfast in its resolve to sustain Exploration and Production (E&P) activities with the aim to bridge prevailing energy demand supply gap and to contribute in the economic growth of Pakistan.
OGDCL being the market leader in E&P sector of Pakistan holds the largest exploration acreage which as of March 31, 2021 stood at 91,795 sq. km representing 45 per cent of the country’s total area under exploration.
OGDC’s business exploration portfolio currently comprises fifty 50 owned and operated joint venture exploration licenses. Additionally, the company possesses working interest in eight blocks operated by other E&P companies.