OGDCL discovers new oil, gas reserves in Hyderabad

[pkd]

OGDCL discovers new oil, gas reserves in Hyderabad

HYDERABAD: Oil & Gas Development Company Limited (OGDCL) has discovered new reserves of oil and gas in Hyderabad.

According to a notice issued by Karachi Stock Exchange, OGDCL has discovered oil and gas reserves from Shah well no 1 situated in Tandu Allahyar-Hyderabad district. At least 15.4 cubic feet gas and 165 barrel oil per day will be produced from the well, it added.

 

[Hyde]

165 barrels of oil per day hahaha we need 100,000 barrels or million barrels of Oil per day in discovery

anyway, better than nothing

 

[ejaz007]

This news should have gone into economy news section. No need to open a new thread. This is slightly old news.

Mr. X 165 barrels a day oil is worth more than 4 million dollars a year.

 

[su-47]

This news should have gone into economy news section. No need to open a new thread. This is slightly old news.

Mr. X 165 barrels a day oil is worth more than 4 million dollars a year.

I don't that would be cost-effective. Oil production is very capital intensive. 4 million dollars a year won't cover the fixed costs of extracting the oil.

Production will have to be increased, and economies of scale will have to be achieved, even though it'll mean the reserves will run out sooner. Otherwise I don't see how the cost will be recovered

 

[ejaz007]

Typically a well drilled in Sindh province costs around 5 million dollars excluding well testing services. Add another 2 million to the drilling cost. It comes around 7 million dollars. Then depending on the type of plant required add another 4-5 million daollars. This makes around 12 million dollars of investment.

Now I have only given oil's revenue which is 4 million. Considering the well is going to produce 14 MMSCFD gas, gas revenue shall be around 4.2 million. If you extract LPG from gas than add another estimated 1 million a year. So the revenue comes to about 9 million a year.

For an investment of 12 million the revenue is around 9 million a year. Then if you discover more wells than the revenue increases. So the investment is quite justified.

Remember its the first discovery in a field that is difficult. Once you have discvered a lead than further discoveries are a bit easy.