ISLAMABAD: Kuwait Foreign Petroleum Exploration Company (KUFPEC) has officially exited Pakistan’s oil and gas sector by selling its key assets, valued at approximately $60 million, to Pakistan Exploration (Private) Limited (PEL). This marks the conclusion of KUFPEC’s operations in the country amidst growing challenges in the energy sector.
A senior official from the Ministry of Energy revealed that mounting circular debt, now at Rs2,700 billion, has significantly deterred foreign Exploration and Production (E&P) companies. Of this amount, Rs1,500 billion, including $600 million owed to local and foreign E&P firms, remains unpaid due to defaults by gas companies. Additionally, prolonged delays in amending the 2012 E&P policy further influenced KUFPEC’s decision to divest.
KUFPEC, a subsidiary of Kuwait Petroleum Corporation (KPC), had been active in Pakistan’s energy sector, holding concessions in key blocks such as Dadu, Kirthar, Tajjal, and Qadirpur, as well as the Bhit and Qadirpur leases. While KUFPEC had signed Memorandums of Understanding (MoUs) in 2023 with leading Pakistani firms like OGDCL, MPCL, and Prime Pakistan Limited to expand its portfolio, the company shifted its strategy, opting to redirect investments to other countries.
PEL confirmed the acquisition of KUFPEC’s assets, highlighting the strategic importance of the deal. “This acquisition represents a pivotal step in our expansion strategy, solidifying our commitment to exploring and harnessing Pakistan’s energy potential,” stated a PEL representative.
While specific asset details remain under a non-disclosure agreement, PEL disclosed that advance payments had been made, and the acquisition aligns with the company’s long-term goal of contributing to Pakistan’s energy security. “We are confident that these assets will play a vital role in addressing Pakistan’s growing energy needs and driving sustainable growth,” PEL added in a press release.
KUFPEC’s exit and the resulting acquisition underscore the challenges and opportunities within Pakistan’s energy sector, highlighting the critical need for policy reforms and financial stability to retain and attract foreign investment.
Story by Khalid Mustafa
