• No sale should be authorised without Sindh’s consent.
• CM demanded regular sharing latest production statistics of oil, gas
• CM decides to become party in WLO litigation.
KARACHI (Feb 1): Sindh Chief Minister Syed Murad Ali Shah has emphasised that the federal government must include Sindh’s input in the framework that allows oil and gas exploration and production companies to sell 35% of their stakes to private parties and no sale should be authorised without Sindh’s consent. He directed the Petroleum Division to include the following in the framework :
i. Gas sold to third parties should be prioritised for Sindh Province. Any sale of gas (out of 35per cent) out of the province of Sindh shall be subject to an NOC by the Government of Sindh.
ii. Provincial Governments are allowed to collect the windfall levy directly through E&P companies from the sale of Gas from 3rd party gas buyers.
iii. Producer shall seek approval from Ministry of Energy, Petroleum Division, Government of Pakistan and respective Provincial Governments, for the sale of 3rd party Gas.
iv. Long outstanding demand of Sindh province for the sharing of actual data by the Federal Government (Petroleum Division) relating to the well-head and production for actual valuation of the provincial share to be fulfilled. The draft framework must incorporate provisions for such data sharing with the province regularly. Besides, the underlying risks of price fluctuation and supply chain disruptions also need to be considered while finalising the framework
He demanded that the latest production statistics of oil and gas be regularly shared with Sindh and instructed the Energy Department to pursue effectively with the Federal Ministry of Petroleum for the payment of the windfall levy.
Mr Shah said this while presiding over a meeting of the Sindh Energy Holding Company Ltd (SEHCL), a subsidiary company of the Sindh Energy Department. It was attended by Sindh Energy Minister Nasir Hussain Shah, Principal Secretary Agha Wasif, Energy Secretary Musaddiq Tahirkheli, and SEHCL Chief Operating Officer Tufail Khosa.
The CM in the meeting focused on expanding exploration activities, increasing revenue streams, and securing Sindh’s fair share in hydrocarbon reserves. He reaffirmed the provincial government’s commitment to strengthening the energy sector.
Minister Energy Nasir Shah, Secretary Energy Musaddiq Tahirkheli and CEO SEHCL Tufial Khoso gave a detailed briefing to the Chief Minister about SEHCL’s current portfolio, financial performance, and future roadmap.
Nasir Shah told the CM that SEHCL plays a key role in energy exploration and resource management. He added that the company currently holds working interests in multiple exploration blocks and has invested Rs1.925 billion in exploration since 2014.
A notable achievement discussed during the meeting was the commencement of production from three wells, marking the first time SEHCL has generated direct revenue. The company anticipates net earnings of Rs113 million in 2025-2026, with additional revenue potential from a recently discovered gas field in Shah Bandar.
Expansion Strategy: To further enhance financial sustainability and maximise returns, Murad Ali Shah approved key initiatives, including increasing Working Interest for Higher Revenue.
SEHCL currently holds a 2.5 per cent working interest in exploration blocks, which limits revenue potential. The Chief Minister directed the Energy Department to increase working interest from 2.5 per cent to 10-15 per cent in highly prospective blocks, ensuring a greater share in future discoveries.
Acquisition of Hidan Block: The Chief Minister approved the acquisition of Hidan Block (a designated oil and gas exploration area), located in Dadu, Kambar, and Shahdadkot districts. With an estimated gas reserve of 130-140 BCF, this block presents a lucrative investment opportunity.
The details of the block include SEHCL retaining a 51 per cent working interest, with the remaining 49 per cent to be farmed out to leading industry players like PPL, OGDCL, or MPCL. Projected first gas production is anticipated by Q1-2028, with an estimated annual net cash flow of $1.64 million (Rs. 460 million) over 23 years. The total investment is projected at $20.3 million, with SEHCL’s share amounting to $10.35 million (Rs. 2.89 billion).
This strategic move positions Sindh as a leading player in energy exploration, ensuring long-term financial gains and economic stability, the CM said.
Exploring Tight Gas & Offshore Potential: The CM said that Sindh holds significant untapped reserves, particularly in tight gas fields with an estimated 20-30 TCF of potential resources. He added that the provincial government is also exploring opportunities for offshore drilling, which could be a game-changer for Pakistan’s energy sector.
Securing Sindh’s Energy Rights: The Chief Minister also addressed the Windfall Levy (WLO) issue, concerning companies operating in Sindh – United Energy Pakistan Limited and OMV Alpha – challenging the government’s decision to impose WLO. The Chief Minister directed his energy department to pursue legal representation in the Islamabad High Court to secure its rightful share of hydrocarbon revenues.
Additionally, discussions were held on policy amendments to ensure greater provincial autonomy over oil and gas resources, aligning with Article 172(3) of the Constitution. Since Sindh is a key stakeholder in gas production, the Chief Minister demanded that the Federal Ministry of Petroleum reduce the number of its representatives in all state-owned companies (OGDCL, PPL, SSGCL, PSO, GHPL, and MPCL) from two to one and replace them with representatives from Sindh.
Energy Security: Chief Minister Murad Ali Shah reiterated his commitment to expanding Sindh’s energy footprint, directing the Energy Department to expedite approvals and accelerate exploration activities.
“Sindh is rich in natural resources, and we must ensure that these resources are utilised effectively for the benefit of our people,” the CM said and added that by increasing our working interest, securing new exploration blocks, and advocating for our rightful share in energy revenues, we are paving the way for a stronger, self-reliant Sindh,” he stated.
The strategic decisions made in this meeting marked a turning point for SEHCL and Sindh’s energy industry. With a stronger financial outlook, expansion into high-potential blocks, and proactive policy initiatives, Sindh is set to become a key player in Pakistan’s energy landscape.
These forward-thinking initiatives will not only boost provincial revenues but also contribute to Pakistan’s overall energy security, ensuring a stable and prosperous future for Sindh
