Pakistan has witnessed 5 to 6 percent negative growth in exploration and production (E&P) in oil and gas sector during the last four years of Pakistan Muslim League-N government. Since 2013 500 million cubic feet per day (mmcfd) local gas has been added to the system, but at the same time production from existing fields has dropped by 600 mmcfd. Independent energy experts told this correspondent that the present government was focused on imported gas (LNG) but has not paid much attention to local oil and gas E&P activities to meet the ever-growing energy needs in the country.
According to Board of Investment (BoI) figures, foreign direct investment in oil and gas sector has declined since the present government came into power in 2013: FDI in oil and gas sector was $502 million in 2013-14. It declined to $73.9 million (July-November 2017). Nabeel Khurshid, a senior analyst at Topline Securities told Business Recorder that no major sustainable foreign investment in oil and gas sector came during the last four years: "One major investment in oil and gas sector was recorded at $155 million which was generated through divestment of 5 percent government share in Pakistan Petroleum Limited (PPL) in 2015," he added.
He further said some progress has been seen in oil exploration activities in Sindh and Balochistan. The indigenous oil production increased from 76,000 barrels per day to 88,000 barrels per day during the last four years. However, gas production declined to 3.9 billion cubic feet per day (bcfd) in 2017 from 4 bcfd in 2013.
An official of Petroleum Division claimed that the present government took a number of initiatives which resulted in drilling of 179 exploratory wells and 194 appraisal/development wells in potential areas by different E&P companies. Subsequently, the E&P companies made 98 new oil and gas discoveries with 40 percent success rate.
Many foreign E&P companies wound up their business in Pakistan during the past four years. At present most of the oil and gas fields are owned by domestic public sector companies like Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL).
Since 2013, Canadian oil and gas exploration firm Niko Resources (Pakistan) Limited (NRPL) packed up because of low wellhead gas prices that made it difficult to sustain operations. Baker Hughes was another international E&P which pulled out of Pakistan; and Tullow Oil and Premier Oil also withdrew their investment from Pakistan in oil and gas sector.
Chief Executive Officer Raziuddin, Khyber Pakhtunkhwa Oil and Gas Company Limited has reportedly said that provinces are expressing concerns with the federal government's failure to offer fresh exploration blocks for bidding to investors over the past four years and insisting the provinces be given full rights and control over oil and gas reserves in their areas.
He further said that the provinces want the Council of Common Interests (CCI) to ensure the implementation of Article 172 (3) of the Constitution in letter and spirit. Provinces point to the inability of the Directorate General of Petroleum Concessions to offer even a single exploration block for bidding since the 2012 policy was announced as indicative of failure to implement the relevant article of the constitution.
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