PRIME Minister Shehbaz Sharif has directed authorities concerned to prioritize the exploration of new oil and gas reserves and fully digitize the country’s oil and gas supply chain to curb smuggling, enhance transparency and reduce the burden of fuel imports on the national exchequer.
Addressing a meeting, which was briefed on the roadmap for the petroleum and gas sector, he instructed that the entire oil and gas supply chain — from imports and transportation to distribution and end-user consumption — should be digitized on a priority basis. The digitization would help prevent smuggling of petroleum products, improve monitoring and deliver tangible financial benefits to the national treasury.
Going by the fact that Pakistan has bright prospects for oil and gas finds, the history of the sector is a story of missed opportunity, therefore, the Prime Minister has done well by declaring exploration as a priority for his government. Reliable studies and surveys suggest Pakistan possesses significant, largely untapped oil and gas potential, with large sedimentary basins and substantial unconventional (shale) resources estimated in the billions of barrels of oil and trillions of cubic feet of gas, but faces challenges in extraction like security issues, need for advanced technology and high investment, leading to reliance on imports despite these reserves. Pakistan’s promising potential in oil and gas was also confirmed by US President Donald Trump, who declared in August last year that “Pakistan has vast untapped energy potential and America should be its partner in developing it”. In fact, reports appearing off and on also suggested significant offshore potential for oil and gas but intriguingly no progress could be achieved to translate this potential in tangible gains. Development of local oil and gas sector should have been the priority for every government as the country spends up to $15 billion a year on import of oil and gas, straining its hard earned foreign exchange. Pakistan’s oil and gas production faces declining trends, with recent figures around 71,000 barrels per day (bpd) of oil and 3.2 billion cubic feet per day (bcfd) of gas, down from peaks in 2015 and 2012 respectively, due to aging fields and fewer major discoveries, leading to increased reliance on imports like LNG. Recent discoveries by the Oil and Gas Development Company Ltd. (OGDCL) in KP offers hope. Incidentally, the PM held the meeting to review the oil and gas sector’s prospects and challenges in the backdrop of a significant discovery by the OGDCL. These reserves are capable of producing 4,100 barrels of oil per day and 10.5 mmcfd of gas, marking a significant addition to the country’s indigenous energy resources, which is a positive development for Pakistan’s energy security and economic stability. Success of oil and gas exploration can surely help the country overcome its economic woes in terms of saving in foreign exchange and affordable availability of energy to boost economic activities. It is time the Government comes out with an attractive package of incentives for investment in the exploration sector. However, it is also a reality that only incentives will not work if the trend to politicize commercial exploitation of oil and gas reserves as well as mineral wealth continues. A national dialogue should be initiated to develop a consensus strategy for the purpose. Meanwhile, the Government surely deserves the credit for improved supply of gas during winter when the demand increases for understandable reasons. The improved situation has also enabled the Government to resume gas connections (RLNG-based) with a target to provide 350,000 connections by June this year. It is also encouraging that the national gas supply network will strengthen with the commissioning of more (indigenous) pipelines. Pakistan has 105 trillion cubic feet of shale gas and it can be exploited through partnership with foreign firms like those of the United States.
