The new Petroleum Minister Ali Pervaiz Malik is poised to resolve numerous issues in the oil and gas sector that have stalled the growth of indigenous oil and gas exploration activities.
These issues have remained unresolved due to bureaucratic style of the former Petroleum Minister Musadik Malik, who's appointment had been opposed by the local oil and gas industry.
Rather than resolving issues, he had created bottlenecks, and Prime Minister Shehbaz sharif had to intervene by formulating committee on gas, headed by Foreign and Deputy Prime Minister Ishaq Dar.
Due to these hurdles, Musadik Malik was removed, and the new Petroleum Minister, Ali Pervez Malik, is now at the helm to address key challenges faced by the oil and gas exploration sector.
The first challenge is to ensure the signing of a model agreement between the government and oil and gas exploration companies to inject tight gas in the system.
State-owned Oil and Gas Development Company Limited (OGDCL) made history by being the first to inject tight gas from a well, despite the absence of a model agreement.
The company was granted a provisional gas price for tight gas.
The country has 84 tight gas wells in total, out of which OGDCL is the owner of 82 wells.
Despite the state-owned OGDCL owner of 82 wells, the former petroleum minister did not notify the company of the model agreement policy, which led to OGDCL having to inject tight gas into the system at provisional prices.
Exploration companies are now hopeful that the new petroleum minister will play a proactive role to finalise the model agreement for tight gas.
Secondly, while the country has sufficient shale gas wells, the absence of an attractive pricing policy has discouraged companies from pursuing exploration of this gas.
They are now expecting the new minister to play a role to approve certain incentives for exploration of shale gas in the country.
The companies were also facing the issue of circular debt, which had also resulted in creating bottlenecks in exploration activities due to cash flow challenges and also to resolve the issue of circular debt.
Ali Pervaiz Malik was called on by representatives of the Pakistan Petroleum Exploration and Production Companies Association (PPEPCA) headed by its chairman Taha Ali Temini, Country Manager KUFPEC, to discuss key opportunities and challenges in the country's oil and gas sector.
Malik acknowledged PPEPCA's vital role in the energy sector, and underscored the government's commitment to facilitating a conducive business environment.
He said that the oil and gas exploration sector is a cornerstone of Pakistan's economy, and the government is focused on reducing the sector's import reliance.
PPEPCA represents leading exploration and production companies operating in Pakistan, playing a pivotal role in the country's energy landscape.
During the discussions, PPEPCA highlighted its members' role in bolstering Pakistan's energy supplies and generating substantial revenue for the national exchequer. The association also raised operational issues impacting exploration and production activities.
Ali Pervaiz Malik assured PPEPCA of the government's full support in resolving industry challenges, emphasising a collaborative approach to ensure sustainable growth in Pakistan's petroleum sector.
PPEPCA members welcomed the minister's proactive approach and expressed optimism about the efforts to enhance exploration activities, attract investment, and drive economic progress.
The meeting concluded with a mutual commitment to strengthen public-private cooperation for the sustainable development of Pakistan's petroleum sector. The delegation included Andrzej Kaczorowski MD Polish Oil and Gas Company, Faheem Haider MD Mari Energies, Zaheer Alam President United Energy Pakistan, Kamran Ahmed CEO Orient Petroleum Inc., and Kamran Ajmal Mian CEO Prime Pakistan among others.
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