Country registers 2pc negative growth in last four years

WASIM IQBAL

ISLAMABAD: Pakistan has registered two percent negative growth in gas production in the last four years.

Gas production declined to 3.8 billion cubic feet per day (bcfd) in 2017 from 4 bcfd in 2013. However, oil output rose by up to 6 percent to about 89,000 bpd compared to 72,000 bpd during the tenure of Pakistan Peoples Party, sources said.

Independent energy experts told this correspondent that the present government’s inordinate focus has been on imported gas (LNG) and it has not paid much attention to local oil and gas Exploration & Production (E&P) activities to meet the ever-growing energy needs in the country.

According to Board of Investment (BoI), 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 and declined to $138.6 million in July-February 2018.

According to officials of Ministry of Petroleum, foreign and domestic companies invested around $10 billion in petroleum E&P sector during the last four years. However, no major discovery in oil and gas sector has been made after 2012.

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 $155 million 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. Indigenous oil production witnessed some growth during the last four years.

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. Recently OMV, the international integrated oil and gas company based in Vienna, has announced it would divest its upstream business in Pakistan.

Chief Executive Officer Raziuddin, Khyber Pakhtunkhwa Oil and Gas Company Limited told Business Recorder that provinces have expressed concern with the federal government’s failure to offer fresh exploration blocks for bidding to investors over the past four years and insist that they (the provinces) be given full rights and control over oil and gas reserves in their areas.

He said not a single block has been offered for bidding since 2013 out of 35 pending blocks; leases awarded before 2012 have also expired and are not being renewed, whereas gas and oil services and investment companies have left KPK.

A senior official of Ministry of Mineral Balochistan said that the province became more accessible after the military successes in tackling the long-running militant and separatist insurgency. He said that the impetus was seen after China announced its intention to build a trading route through Pakistan, using Gwadar Port. He further disclosed that Pakistan Petroleum plans to drill 12 new wells in the region by the end of next fiscal year.