Following a reduction in production by oil and gas exploration companies, the government is mulling over a plan to operate only two refineries -
The move is being considered following a slump in demand for petroleum products in the wake of coronavirus-induced lockdown in most parts of the country.
Parco uses imported and locally produced crude oil whereas ARL mainly operates with local crude oil.
The demand slump has already led to the closure of
Sources told
Under the proposed plan, ARL and Parco would continue their operations whereas the other three refineries - Byco,
The government cannot afford the closure of ARL as it operates on locally produced crude oil. In case it is shut down, several fields of oil and gas exploration companies will also have to be closed.
Parco, a joint venture between the
'But there is no increase in demand and we are just surviving on an hour-to-hour basis. You know that NRL and Byco are already shut. ARL has also shut down its main plant. Parco is getting back on line,' said the PRL managing director.
Meanwhile, ARL chief executive officer, in a letter sent to the Petroleum Division, said despite the assurance given by the government, there had hardly been any improvement in product demand.
Only
He said given the overall situation, they would have to shut down their main unit just to cater to the heavy crude oil produced by the Potohar/north region. 'We would partially be operating for the next few days after which crude oil stocks will top up and a complete shutdown of the refinery is imminent.'
In case of complete shutdown, crude oil and associated gas supplies from the exploration and production companies would be affected, ARL CEO
The main unit, which was running at a reduced capacity of 26,000 barrels per day (bpd), was shut down on Monday and two small plants of combined capacity of 13,000 bpd were started to run for a few more days.
'If the government does not come to the rescue by pushing OMCs to lift ARL products, the refinery will totally shut down in less than a week with catastrophic consequences for oil and gas fields,' Khattak told
The oil industry says there is no coordination between the federal and provincial authorities. The Petroleum Division has declared refineries and OMCs as essential services exempted from the lockdown but their vehicles are being impounded by the Punjab police and civil administration and are not being released despite instructions by the Petroleum Division.
E and P firms under threat
With the refineries being forced to shut down, the oil and gas exploration companies have also started feeling the heat. In a letter to the Petroleum Division, a copy of which is available with
'On
The MOL management said Parco told it on Monday to cease dispatches of 3,000 bpd of crude oil/condensate, effective
'We apprehend that this crisis situation, if not mitigated, would further deteriorate and may head towards complete shutdown of Tal block. Furthermore, some of the wells at critical flow in the Tal block may not be revived and produce hydrocarbon post-shutdown,' MOL Regional Vice President MEA and Pakistan
He requested the petroleum secretary to intervene and advise refineries to continue lifting of crude/condensate from the Tal block in order to avoid shutdown of the field.
The country's largest state-run oil and gas explorer has also started feeling the heat as it has curtailed production. Three major fields of
© Pakistan Press International, source