Petroleum minister's absence stalls key decision on reforms

Delays Dar-led task force's resolution to allocate 35% gas discoveries to private sector

ISLAMABAD:

The 20-member Task Force on Gas-Related Issues, led by Deputy Prime Minister Ishaq Dar, has so far failed to make a decision on selling 35% of future gas discoveries to the private sector, seemingly due to the consecutive absence of Petroleum Minister Musadik Malik.

Sources told The Express Tribune that the Petroleum Division had assured the committee that Malik would attend Monday's meeting via video link from Russia. However, this was the second meeting he missed, preventing the Dar-led committee from reaching a conclusion on the 35% gas allocation to third parties.

The petroleum minister had proposed that the implementation of the 35% allocation be phased in until 2031, with a 5% increase annually from the current 10%. Sources revealed that Dar had earlier conveyed that the task force would not revise the decision made by the Council of Common Interests (CCI).

In the petroleum minister's absence, the division suggested implementing a 25% gas allocation in the first three years and the remaining 10% over subsequent years.

On January 26, 2024, the CCI approved an amended Exploration and Production (E&P) policy, requiring 35% of gas from future discoveries to be sold to the private sector through competitive bidding. The decision also mandated that the Petroleum Division submit an implementation framework to the Executive Committee of the National Economic Council (ECNEC) for approval.

Surprisingly, despite four meetings convened by Dar since the CCI's decision, the task force has not reached a resolution to enforce the amended E&P policy of 2012, which would allow firms to auction 35% of future gas finds to private companies.

According to sources, out of the four meetings chaired by Dar, Malik attended only two, despite initially agreeing to join. Sources suggested that Malik opposed allocating 35% of future gas discoveries to the private sector, and was now seeking to play delaying tactics to push for its reconsideration by the CCI.

The Dar-led committee, sources said, remains hesitant to act in Malik's absence, despite the decision being made by the CCI, the highest governing forum. The next meeting of the deputy prime minister led 20-member task force is expected to take place next week.

Reportedly, Dar expressed his displeasure over Malik's continued absence. Sources said the task force also directed both Sui Northern Gas Pipelines Limited and Sui Southern Gas Company Limited to present a solution regarding the utilisation of an additional 150 MMCF of LNG.