Monday, 25 February 2013


Who is responsible for outage?

Electricity outage that lasted nearly 12 hours is a slap on the face of utility companies involved in generation, transmission and distribution companies of Pakistan. Experts have been warning that not following good governance could plunge the country in complete darkness but no one paid any attention. Not only that millions of people spent sleepless night but millions of man-hours were also wasted. The delay in issuing any clarification for the outage, gave birth to rumors like India has attacked and it is a forced outage.

In the simplest words the ordeal started mainly because demand exceeded supply and the system tripped. Ideally, this should have not taken more than couple of hours had the system was in order. The initial reports suggested that 4,000MW capacity was offline because power generation companies didn't have the funds to purchase oil. This also nullifies the perception being created by the incumbent government that demand exceeds supply.

According to media reports the massive power breakdown plunged major parts of the country into darkness late on Sunday night. From Islamabad to Karachi, most major cities reported power outage. There was suspension of electricity supply in Lahore, Gujranwala, Multan, Quetta, Peshawar and Sukkur and other cities because of a major fault. In Karachi alone, 36 grid stations tripped, plunging most of the city areas into complete darkness. Many cities and towns in Sindh witnessed complete outage and most of Balochistan was also without electricity.

The entire country suffered complete blackout, third in the past ten years as the entire power generation, transmission and distribution system collapsed. The domino effect led to tripping of power plants one after another. The trauma started from Uch and Hubco plants having an aggregate generation of around 1,750MW constituting almost 25 per cent of total national generation. This led to tripping down of Mangla well as Tarbela dams. By midnight the entire country was plunged into darkness as safety mechanism at all plants switched them off to protect them from any damage.

At that time generation had dipped to less than 8,000MW, with demand hovering above 13,000MW there was a deficit of 5,000MW. That was too high a pressure on a system which has no backup. According to sector experts the accident assumes a criminal negligence because there was no fuel to run 4,000MW capacity. The only regret is that no lessons had been learnt from the last two national breakdowns.

As media was desperate to find a clue to this outage all sorts of replies were given. Initially, no one had the slightest realization of the problem and in Karachi media was that there was a minor fault at Hubco due to which load was shifted to Mangla and Tarbela grid stations, which also tripped, causing a blackout across most of the country. Experts say tripping of Mangla and Tarbela grid stations was natural because of overloading. Therefore, this should not be considered a fault. 

A large number of residents came out of their homes and there was panic when people started receiving phone calls from their relatives in other cities. Soon rumors started spreading that the blackout was the result of a terrorist attack on the national grid system. There were also speculations about a cyber attack on the system.

Though, prime minister has ordered an investigation, not much can be expected. Whatever happened was the outcome of violation of standard operating procedures and complete disregard to good governance. The system could have sustained even higher losses, had it not shutdown.

Courtesy: The Financial Daily

Saturday, 16 February 2013


OGDC Commence Production from Sinjhoro Phase-I


According to information being made available phase-I of Sinjhoro development project, located near district Sanghar (Sindh province) has been completed successfully. Oil and gas production flows of 1,100bpd and 12mmcfd respectively have been confirmed.
According to a brokerage house report (BMA Capital) the annualized impact on OGDCL profitability stands at PKR0.50-0.55/share. The impact on earnings will be visible in 2HFY13 and onwards.
The project is a joint venture between OGDCL (62.5%), OPI (15%) and GHPL (22.5%), with OGDCL serving as the operator. The company further plans to add another 1,600bpd of crude oil and 9mmcfd gas upon completion of phase-II at Sinjhoro (targeted in 2QFY14).
Based on BMA valuation methodology, the TP of OGDC stands at PKR215 per share representing a total return of 10% justifying an ADD stance on the stock. At current trading levels, the stock is trading at a PER of 7.8x and 6.9x to our FY13E and FY14E EPS respectively

Wednesday, 6 February 2013


Byco SPM receives second shipload of crude oil

Another page has been created in the history of Pakistan with the arrival of the largest consignment of crude oil ever to be brought into the country through a single oil tanker, being discharged through the Byco’s deep sea Single Point Mooring (SPM) facility for Byco Oil Refining Complex. Crude oil shipment of around 79,000 tons has been brought from the UAE.

This is the second ship being offloaded through the SPM that was tested on December 26, 2012 when the first crude oil tanker successfully completed the discharge of around 70,000 tons of crude oil.

With a draft of 25 meters, the Byco SPM can accommodate vessels carrying Crude/ Petroleum products of over 100,000 tons. Presently smaller shipments of petroleum products are being imported through Karachi Port and Port Qasim due to the draft limitations of both these ports.

Speaking on the occasion, Imran Farookhi, CEO Byco Terminals Pakistan, the company that owns and operates the SPM, said, “This is yet another milestone that we’ve achieved. As per our business plan, we are gradually increasing the cargo size of each incoming load and soon the SPM will be catering to vessels carrying more than 100,000 tons crude oil.”