Welcome to the Annual Technical Conference (ATC) 2016, jointly organized by Pakistan Association of Petroleum Geoscientists (PAPG) and Society of Petroleum Engineers (SPE), Pakistan Chapter. This has been a regular annual event of the petroleum industry for more than two decades. ATC provides a common platform for the Industry professionals to meet and discuss the issues of mutual interests. The Conference also provides opportunities to operators, service providers, regulators and other stake holders for fair and frank discussions that help in resolving outstanding issues.
Exploration and Production (E&P) business in Pakistan as the rest of the world, has become increasingly tough, investment, risk and technology intensive. The country has been facing a huge challenge in meeting its ever-growing energy needs due to a growing population and economic growth. Given this scenario together with the low to medium prospectivity of conventional energy resource, strategies were being formulated to explore and develop conventional as well as unconventional energy resources for meeting 21st century energy supply challenges but decline in oil price has tainted the scenario and now, different strategies would have to be adopted to survive in the prevailing environment.
This year's theme, "Oil Price! Domestic Challenges and E&P Strategies" is quite relevant to the current environment as oil price though causes a positive effect to Pakistan's economy but has a significant impact to E & P sector. To this end, there is ever greater need to synergize the strategy together with Geoscientists, Petroleum Engineers (Reservoir, Production and Drilling etc) and the Policy Makers.
The crude oil price is an important factor for the economy of any country (developed, developing or under-developing countries). For those countries that produce and export crude oil would prefer for higher oil prices to increase their foreign reserves to control inflation. Pakistan import crude oil and refines it locally for the consumption. Declining prices of oil encourages for issuing new licenses to other oil marketing companies and brings additional investment in Pakistan. Declining oil prices also influence the stock market particularly to the oil sector's companies like OGDCL, MPCL PSO etc. resulted in loss of share price because the profit margin reduced due to price cut. On the supply side, when prices fall it is reasonable to expect that either more expensive production would be reduced to ensure profitability at new prices, or cost would fall, or some combination of the two. Indeed, cost inflation in the oil industry has started falling more recently as the industry adjusts to the new, lower oil price environment. This holds implications for the industry as cost deflation could materially improve the profitability of projects. The prospects for a continuation of this trend are of particular relevance in an industry where project scales are typically large and long-term, and require considerable upfront capital investment. Furthermore, in response to the fall in prices all major independent oil and gas companies have announced spending cuts on the order of 20-25% and they have delayed final investment decisions on a number of large projects. Lower investment today should mean lower output and higher prices tomorrow, keeping other factors constant.
It is with this spirit the ATC 2016 is going to be conducted as it is expected to attract a galaxy of geoscientists and engineers from industry and the academia. As such this will provide an excellent forum to these people to interact, share knowledge and learn from each others' experience. I wish all the success to the organizers of the conference and hope that every professional and academician participating in it will reap the benefit.