Pakistan Petroleum Ltd., the nation’s second-largest fuel explorer, expects profit to rise to a record this fiscal year as natural gas from new fields bolsters production, Chief Executive Officer Asim Murtaza Khan said.
“The bottom line for the year will be higher” than last year’s 42 billion rupees ($392 million), Khan said in an interview in Karachi. “How much higher, it is very difficult to say right now.”
The increase in gas production will help meet growing energy demand in Pakistan, where power shortages sliced 2 percentage points off growth last year, shutting factories and spurring social unrest. With an 18 percent share of the country’s total gas output, Pakistan Petroleum is the largest supplier after Islamabad-based Oil & Gas Development Co.
The company will add as much as 100 million cubic feet of gas a day by the end of June from blocks including Tal, Latif and Nashpa, Khan said yesterday. It plans to spend a record $200 million this year on new and current fields.
“The latest expansions have been great and working well for them,” Furqan Punjani, deputy head of research at BMA Capital Management Ltd. in Karachi, said by telephone.
The stock rose 0.9 percent to 202.5 rupees as at 11:16 a.m. in Karachi, extending this year’s gain to 37 percent this year. Oil & Gas Development has risen 34 percent this year, tracking the 33 percent advance in the benchmark KSE100. (KSE100)
Pakistan Petroleum produced 331.5 billion cubic feet of gas and 2.9 million barrels of crude oil in the last fiscal year ended June 30, according to its annual report.
The explorer is one of the state-run companies Prime Minister Nawaz Sharif’s five-month old government plans to offer for stake sale as it struggles to control the fiscal deficit and revive the $231 billion economy.
“We have suggested to divest the company to a strategic buyer rather than offloading in the capital market as it will bring technology,” Khan said. The government holds 71 percent stake in Pakistan Petroleum, according to data compiled by Bloomberg.
In the quarter through September, sales totaled 28.2 billion rupees, a 15 percent increase from a year earlier. The Karachi-based company will probably maintain a “similar pattern” in the current quarter, Khan said.
Pakistan Petroleum isn’t only expanding at home. Last year it acquired rights to explore a block in Iraq covering 6,000 square kilometers (2,320 square miles) across Wasit and Diyala provinces. The company is making progress at the project and plans to invite bids for seismic surveys in December, Khan said. It’s also looking for further opportunities in Iraq and Yemen.
Pakistan produced about 4 billion cubic feet of gas a day on average last year, falling short of demand that peaked at almost 6 billion cubic feet. Khan said he’s due to travel to the U.S. this month for a conference, where he hopes Pakistani energy companies will attract small- and mid-sized partners.
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