No Energy Firm Interested in Offshore Oil and Gas Drilling

Staff Report: The National Assembly Standing Committee on Energy (Petroleum Division) was informed on Thursday that no company was interested in offshore oil and gas exploration activities in the country after the exploratory well Kekra-1 remained dry in 2019.

Presided over by the chairman of the committee, Syed Mustafa Mehmood, the members inquired about the reasons for the lack of interest from international players in Pakistan’s oil and gas sector.Security forces foil cowardly terrorist attack on Bannu Cantt

Musadik Malik, the petroleum minister, briefed the standing committee, stating that major oil and gas companies were leaving Pakistan. His words prompted reactions from the committee members, who inquired about the reasons for the exit of these companies from the country.

The minister explained that global companies gravitate towards countries where it is easy to do business. “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 have to spend a significant amount to maintain security for their employees and assets,” he said. However, he added that discussions were 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. Mr. Malik added that there is a need to increase local oil and gas exploration in Pakistan as the local supplies were 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 the global LNG supply is increasing and Qatar would be increasing its LNG supply by 33 percent next year, with other sources also enhancing their supplies.

Secretary, Petroleum Division, Momin Agha, provided a comprehensive overview of the functions of the Ministry and its attached departments. He informed that the country consumes around 4.2 billion cubic feet of gas daily, including one billion cubic feet of LNG per day.

The committee was informed that the circular debt of the gas sector was around Rs 2,000 billion, while the small domestic gas consumers are given a subsidy of Rs 130 billion, which is passed on to other gas users.

The officials also added that managing the prices of LNG was becoming difficult for the government and suggested that the power sector would have to pick up the entire LNG supplies. The petroleum minister noted that the energy sector was facing cash flow issues regarding fuel, and even the state-owned oil marketing company PSO was facing problems in this regard.

The meeting was attended by Syed Naveed Qamar, Muhammad Nawaz Khan, Shahid Ahmed, Anwar-ul-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.