The gas that built Pakistan but left Balochistan behind

Till 1982, Balochistan was fulfilling 82% of Pakistan's natural gas needs, and that too from the district of Dera Bugti alone, which is host to the gas fields of Sui, Loti, Pirkoh, Uch and Zin. Even by 1995, this contribution stood at 55%, and 10 years later, at 25%. The number still hovers around an impressive 20%.

The increase in security challenges in the province over the past two decades appears to be significantly affecting efforts to replace depleting reserves. Otherwise, as to the province's real potential, it may suffice to highlight that out of around 1,250 exploratory wells drilled in Pakistan so far, only 6% have been drilled in Balochistan. Or, to put it another way, around 90% of the province still largely remains unexplored. Thus, a peaceful Balochistan can start a new spree of exploration, helping not only to arrest but even reverse the ongoing decline in indigenous oil and gas production. In view of the above, I thought that my observations regarding the socioeconomic significance of community engagement and its direct relationship with security are worth sharing with the readers.

Community engagement mostly comprises two components. The first is the role of the state in dispensing its responsibilities towards the citizens of an area, namely the provision of health, education, employment, etc. When a state fails in this duty, it results in despondency and alienation among the public, which can end up being exploited by negative forces. In my view, amongst other factors, this lies at the core of our current challenges in Balochistan and Khyber-Pakhtunkhwa (K-P).

The oil and gas districts are the most glaring examples of this phenomenon. Tens of billions of rupees are collected, other than taxes, in the form of royalty every year from E&P companies. Production bonus is additional. However, with a few exceptions, the areas are virtually as backward as they were when the fields started.

The other component comprises the E&P companies operating in those areas. With the state's failure in its responsibility, it becomes a herculean task for them to deal with the associated communities. Still, it proves to be somewhat easier if we adopt certain principles and standard operating procedures right from the start. For example, community engagement does not at all mean aligning with a few in the community's elite and showering undue largesse upon them in the form of contracts and employment to their nominees, or by creating a class of cronies through undue favours. This invariably results in a company gradually becoming hostage to the avarice of a few unscrupulous individuals.

Genuine engagement, on the other hand, is an arrangement where a community at large starts considering the successes of a business outfit as its own. This ownership can only develop if the company, though within permissible limits, genuinely serves as an agent of socioeconomic uplift for the community. This can be achieved through a well-thought-out and merit-based process of a community's integration by a company in its operations in terms of optimal utilisation of its human capital, procurement and contracting systems, and corporate social responsibility projects.

What is to be done

Pakistan's gas and oil production peaked in 2012 at around 4,300 mmscfd and in 2015 at 95,000 bpd, respectively. Most of the old fields are now in an advanced stage of depletion. The new fields have not been able to add reserves as required. As a result, gas production currently rests at around 3,100 mmscfd and oil at 72,000 bpd. This is because, amongst other factors, large hydrocarbon prospective regions are virtually hostage to situations akin to force majeure.

This necessitates a review of the government's community engagement model currently in place. That can be undertaken by means of an engagement survey in the oil and gas fields all over the country, followed by a baseline study to assess the change since the start till now in their Human Development Index (HDI). For comparison, a few fields located in other countries such as Vietnam and Norway may also be incorporated in the study.

I personally believe that the government should focus more on deploying the available funds of royalty and production bonus, etc, for imparting skills-based technical education to youngsters and providing foreign scholarships to bright students from the communities for higher engineering studies. In addition, they may also be used for establishing community-based industrial cooperatives of small and medium industries. These cooperatives may consist of garment factories, technical workshops, agricultural products processing factories, warehouses and silos for food storage. This would especially equip communities in depleting fields like Sui to transition smoothly to alternate economies.

Secondly, we have observed a qualitative degradation of Balochistan's security situation since the loss of life of Nawab Akbar Bugti in 2006. Therefore, the solution, at least partially, lies in dispassionately studying what went wrong in the province in the Musharraf era. It may help in improving the state's engagement with the public and calibrating its associated strategy. As to the other part, namely the relationship of an E&P company with a community, it is essential for a company to genuinely respect them as equals at all times. Another essential is respecting local traditions and community elders. When elders are made to sit outside offices for hours or declined meetings by the management, small grievances soon convert into gaping sores.

Similarly, promises which cannot be fulfilled should never be made by a company. Even a word indiscreetly uttered can be misperceived and kindle hopes in their challenging lives. Those hopes, when not fulfilled, develop frustration, which can become easy prey to vested interests.

The discussion about unfilled hopes took my mind to the 12 tcf gas discovery at Sui No 1 in 1952 and the aspirations it must have awakened among the residents of Dera Bugti. However, as per a recent Sustainable Development Policy Institute (SDPI) study, with an HDI of 0.236, Dera Bugti falls in the list of the 10 least developed districts of Pakistan. Please note that HDI is a tool widely used to measure a geographical entity's average status with respect to education, health and living standards.

What further accentuates the injustice is the fact that the other nine districts in the above list are also located in Balochistan, including Khuzdar, a major mining region, with an HDI of a meagre 0.105. It is indeed heart-wrenching and ample indication that the above-mentioned aspirations largely still remain unrealised. Such acute deprivations need to be addressed on priority, which would go a long way in improving the community's engagement with the state. In my considered view, such engaged communities would serve as the bulwark against the security challenges confronting us currently in the province.

THE WRITER IS A PETROLEUM ENGINEER AND AN OIL AND GAS MANAGEMENT PROFESSIONAL