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ISLAMABAD: An official from the Ministry of Energy stated that a foreign company has initiated its withdrawal from Pakistan’s oil and gas sector by selling assets valued at approximately $60 million to a local entity.
Growing Challenges in Pakistan’s Energy Sector
“The foreign E&P companies are increasingly disheartened, primarily due to the massive circular debt in the gas sector, which has reached Rs2,700 billion. Of this, Rs1,500 billion, including $600 million owed to local and foreign Exploration and Production (E&P) companies, remains unpaid due to defaults by the gas companies. The 12-month delay in approving amendments to the 2012 E&P policy also contributed to KUFPEC’s decision,” the official stated.
A government official has confirmed that KUFPEC plans to sell off its holdings in several blocks around Pakistan in order to raise capital for future investments overseas. In April 1981, Kuwait Petroleum Corporation (KPC) created KUFPEC as a branch of KPC. Outside of Kuwait, the company’s main focus is finding, developing, and extracting natural gas and crude oil. Across five continents—Europe, North America, Asia, and Africa—it serves ten different countries.
KUFPEC’s Recent Strategic Partnerships
It is worth noting that KUFPEC announced the signing of MoUs with Pakistani businesses Prime Pakistan Limited, Oil and Gas Development Company Limited (OGDCL), and Mari Petroleum Company Limited (MPCL) in a news statement dated November 23, 2023. The purpose of the memorandums of understanding was to strengthen KUFPEC’s portfolio of exploratory projects, strategic alliances, and asset value in Pakistan.
“The MoUs are not limited to strengthening strategic partnerships to expand our exploration portfolio in Pakistan but also provide significant opportunities to enhance KUFPEC’s assets, independent peer reviews, knowledge exchange, and utilizing the expertise of our global partners,” commented KUFPEC CEO Mohammad Al-Haimer at the time.
But now, less than a year later, Pakistani officials are very worried about KUFPEC’s choice to sell its concessions and assets. In response to the question, PEL said, “Yes, we have acquired KUFPEC Pakistan’s assets after winning the bid.”
Nevertheless, due to non-disclosure agreement (NDA) requirements, the corporation chose not to reveal the asset’s worth. KUFPEC has also been paid in advance by PEL. The properties in Pakistan’s Dadu, Kirthar, Tajjal, and Qadirpur concessions, as well as the Bhit and Qadirpur leases, are included in the acquisition, according to a news release on PEL’s website.
“This strategic acquisition marks a significant milestone for PEL as it expands its exploration portfolio and strengthens its presence in Pakistan’s energy sector. It underscores PEL’s commitment to discovering and harnessing the country’s energy potential,” the release stated.
With this purchase, PEL is moving closer to its long-term goal of discovering new energy sources and developing Pakistan’s abundant natural resources. The energy company PEL expressed confidence in its ability to fulfill Pakistan’s increasing demand for its products and services. Pakistan Energy Limited (PEL) reaffirmed its dedication to the country’s long-term economic prosperity and energy independence through the responsible exploitation of Pakistan’s abundant natural resources.
