Pakistan’s oil & gas exploration firms may have to cut output

ISLAMABAD: Pakistan’s oil & gas exploration firms could also be compelled to chop manufacturing of crude oil and pure gasoline following the closure of a second plant of Attock Refinery Restricted (ARL) on Thursday.

ARL closed its second unit of 5,000 barrels per day (bpd) attributable to low offtake by the oil advertising firms (OMCs). ARL administration has sought speedy intervention of the Petroleum Division, asking it to direct OMCs to raise domestically produced petroleum merchandise reasonably than giving precedence to imported gas.

Earlier, ARL shut down one unit of 5,000 bpd and now it has closed the second plant of the identical refining capability. Shares of high-speed diesel (HSD) have piled up following the refusal of OMCs to raise native petroleum merchandise.

ARL’s operations are completely primarily based on domestically produced crude oil because it lifts gas from the native oil manufacturing firms. If the refinery is shut down, all the vitality chain could also be disrupted and exploration firms could also be compelled to scale back manufacturing that will influence gasoline manufacturing as properly. Following the shutdown of the second plant, ARL’s operational capability has been lowered to 62%.

ARL Chief Govt Officer Adil Khattak wrote a letter to Petroleum Division director common oil on Thursday and knowledgeable him that they’d no different choice apart from shutting down one other crude distillation unit of 5,000 bpd at this time (Thursday) in an effort to handle the critically excessive stocks of HSD.

He identified that it might end in additional discount of crude receipts from the exploration and manufacturing firms.

With the closure of this unit, he mentioned, ARL could be working at 62% of its nameplate capability. It could be famous that beneath this capability operating the refinery complicated is tough attributable to minimal throughput constraints, he added.

He mentioned the difficulty was additionally highlighted by an ARL consultant throughout a particular assembly held below the chairmanship of extra petroleum secretary on March 16, 2020.

As already defined throughout the assembly, HSD offtake from ARL had slowed down drastically, leading to accumulation of excessive shares with very restricted ullage.

“As of Thursday, we’re carrying 14,000 tons of HSD shares with remaining ullage of hardly someday,” he mentioned, including “We want to inform you that OMCs’ failure to raise the product from ARL will in the end result in full shutdown of our refinery, which is able to end in disruption of the provision chain of E&P firms and related gasoline provides, resulting in severe implications for all involved.”