ISLAMABAD: After nearly a year of deliberation, a high-level committee, chaired by Deputy Prime Minister Ishaq Dar, has approved the sale of 35% of newly discovered gas reserves to private entities through a competitive bidding process.
The decision, aimed at addressing liquidity challenges faced by exploration and production (E&P) companies, is expected to attract $4-5 billion in new investment for offshore exploration. A cap of 100 million standard cubic feet per day has been set for the first year, with annual reviews planned.
This framework will be presented to the Executive Committee of the National Economic Council (Ecnec) for final approval, following a directive issued by the Council of Common Interests (CCI) in January. The CCI, comprising chief ministers of all four provinces, had initially endorsed the sale of unallocated gas volumes to third parties, but implementation was delayed by resistance from state-owned gas utilities, SNGPL and SSGC.
Deputy PM Dar emphasized that reversing the CCI decision or delaying the investment potential in offshore blocks was not an option. The framework also includes a timeline for initiating bidding rounds for available onshore exploration blocks by December 2024, with bids due by March 2025. Offshore exploration blocks will undergo a separate six-month evaluation and bidding process, concluding by June 2025.
In parallel, the Directorate General of Petroleum Concessions (DGPC) is advancing its digital transformation to enhance operational efficiency. Additionally, an Integrated Energy Modelling Study is underway, conducted by international consultants, to refine Pakistan’s gas market model and inform strategic decisions in the energy sector.
The draft findings of the study are scheduled for release in January 2025, offering insights into supply-demand dynamics and prioritizing sectors for gas allocation.
Story by Khaleeq Kiani
