The National Assembly Standing Committee on Energy (Petroleum Division) was informed on Thursday that no company is interested in offshore oil and gas exploration activities in the country following the dry well at Kekra-1 in 2019.
Presided over by Committee Chairman Syed Mustafa Mehmood, members inquired about the lack of interest from international players in Pakistan’s oil and gas sector. Petroleum Minister Musadik Malik briefed the committee, stating that major oil and gas companies are leaving Pakistan. This comment prompted reactions from committee members who questioned the reasons for the exodus.
The minister explained that global companies gravitate towards countries with favourable business environments. “The security cost is also a problem for oil and gas exploration in Pakistan. In areas where companies have to search for oil and gas, they spend a significant amount to maintain security for their employees and assets,” he said. However, he added that discussions are underway with two Chinese companies for investments in onshore and offshore exploration activities in Pakistan.
The committee was informed that 467 oil and gas discoveries have been made in the country to date, including 96 oil discoveries and 371 natural gas discoveries. Malik added that there is a need to increase local oil and gas exploration in Pakistan as local supplies are running low. “We are also working on a new oil and gas exploration policy to make investments in Pakistan attractive,” he said.
The minister also mentioned that global Liquefied natural gas (LNG) supply is increasing, with Qatar set to boost its LNG supply by 33% next year, and other sources also enhancing their supplies.
Secretary of the Petroleum Division, Momin Agha, provided a comprehensive overview of the ministry’s functions and its attached departments. He informed that the country consumes around 4.2 billion cubic feet of gas daily, including 1 billion cubic feet of LNG per day.
The committee was informed that the gas sector’s circular debt is around Rs2,000 billion, while small domestic gas consumers receive a subsidy of Rs130 billion, which is passed on to other gas users. The petroleum division officials also added that managing LNG prices is becoming difficult for the government and suggested that the power sector should pick up the entire LNG supply. The petroleum minister noted that the energy sector faces cash flow issues regarding fuel, and even the state-owned oil marketing company Pakistan State Oil (PSO) is experiencing problems in this regard.
The meeting was attended by Syed Naveed Qamar, Muhammad Nawaz Khan, Shahid Ahmed, Anwarul Haq Chaudhary, Rai Haider Ali Khan, Dr Shizra Mansab Ali Khan Kharal, Gul Asghar Khan, Salahuddin Junejo, Muhammad Moin Aamer Pirzada, Asad Alam Niazi, and Mian Khan Bugti.
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