ISLAMABAD: In a bid to address the nation’s escalating energy needs, Pakistan is set to auction 20 offshore blocks for oil and gas exploration, Petroleum Minister Musadik Malik informed a parliamentary panel on Wednesday. This marks the first time the country will auction offshore blocks, with the government hopeful of discovering new reserves.
Minister Malik, speaking at the National Assembly’s Standing Committee on Energy (Petroleum Division), chaired by Syed Mustafa Mehmood, also announced accelerated efforts in onshore tight gas exploration. New incentives have been introduced to attract companies, as previous policies rendered exploration both costly and unfeasible. Despite the challenges and expenses associated with horizontal drilling in tight gas exploration, work has already commenced on several wells.
Malik reassured the committee regarding concerns over the management of state-owned companies, confirming that three subsidiaries of the Petroleum Division have been transferred to the Sovereign Wealth Fund. He dismissed worries about potential dissolution plans for the fund, stating that no such discussions had occurred in cabinet meetings.
Addressing broader concerns in the gas sector, Malik noted a reduction in sector losses thanks to new Town Border Stations (TBS) aimed at combating gas theft. However, he highlighted that supplying gas to captive power plants remains unfeasible due to IMF restrictions, and noted that K-Electric’s power costs three times more than that of indigenous gas.
The session also highlighted the financial struggles of the Sui Southern Gas Company (SSGC), which faces Rs45 billion in losses, compounded by court orders limiting the collection of bills from domestic consumers. With the petroleum sector’s circular debt nearing Rs3 trillion, Malik underscored the urgency for efficient gas distribution and stringent monitoring to curb losses. Future discussions will focus on Corporate Social Responsibility (CSR) initiatives by public and private oil and gas companies.
Story by Israr Khan
