ISLAMABAD: The government is set to notify the amended Exploration and Production (E&P) Policy 2012 today, enabling E&P companies to sell 35% of gas from future discoveries to the private sector through competitive auctions. This policy aims to attract $5 billion in investments to Pakistan’s oil and gas sector.
According to the implementation framework approved by ECNEC on November 25, 2024, private sector purchases will be capped at 100 mmcfd for the current year. A senior official confirmed that the Law Division has cleared the draft notification, and the Directorate General of Petroleum Concessions (DGPC) is authorized to issue it.
The amended policy allows E&P companies to sell up to 35% of pipeline-grade gas to private entities holding OGRA licenses, with prices determined via competitive bidding. The remaining 65% will continue to be supplied to Sui companies at wellhead prices under the Petroleum Policy 2012.
Boosting Sector Liquidity and Investment
The policy addresses the financial challenges faced by the E&P sector, which has been burdened with a Rs1,500 billion shortfall due to unpaid dues from Sui companies. By securing advance payments for private-sector sales, E&P companies hope to resolve their liquidity crisis.
International and domestic firms have shown significant interest in the upcoming onshore bidding, encouraged by the assurance of competitive pricing and direct private-sector sales.
Policy Development Timeline
The Council of Common Interest (CCI) approved the amended policy in January 2024, directing the Petroleum Division to develop an implementation framework. After nearly 11 months, ECNEC gave its nod on November 25, 2024, based on recommendations from a 20-member task force led by Deputy Prime Minister Ishaq Dar.
Under the amended policy, provinces hosting gas wellheads will be prioritized under Article 158 of the Constitution, ensuring fair allocation.
E&P Companies Optimistic
E&P companies have welcomed the notification, citing it as a pivotal step toward more efficient energy utilization. They argue that private-sector sales will optimize gas use compared to supplying it to Sui companies, which have struggled with timely payments.
The amended policy is expected to spark new exploration and production activities, revitalizing Pakistan’s energy sector and boosting economic growth.
Story by Khalid Mustafa
