Launching and completion of politically motivated gas supply schemes with out exploiting its proven reserves to inject more gas into the distribution system has resulted in its load shedding besides the lingering problem of low pressure. Sacking the Managing Directors of Sui Northern Gas Pipelines and Sui Southern Gas Company, as scapegoats, provides no workable solution. Pakistan may face its worst gas crisis as the PTI government looks set to follow the same pattern of launching gas supply schemes for users as their predecessor used to execute politically motivated schemes, mainly in the constituencies of PML-N parliamentarians.
The PML-N government had formed a committee, under Hamza Shabaz to recommend gas supply schemes and during the last month of its tenure it approved 157 schemes. However, these projects could not be completed till the end of tenure of the government. Now the incumbent government intends to launch these leftover gas supply schemes which will further aggravate the gas crisis in the country. In its Thursday meeting, the Cabinet directed Petroleum Division to put the list of incomplete schemes as well as the fully funded ones of the previous government. The major beneficiaries from the completion of these schemes will be the PML-N parliamentarians in Punjab.
The most appreciable work of oil and gas exploration was done during the tenure of government of President Musharraf from 2000 to 2007. Significant discoveries of oil and gas were made in four Southern Districts of Khyber Pukhtunkhwa (KP) and production crude oil and gas started from Hangu, Shakardarra, Gurguri and Karak oil and gas fields. Oil and gas was struck in Shakaradarra by the Oil and Gas Development Corporation and a Pakistani company, Zever Petroleum in the year 2000. Since then, more discoveries were made in KP in these oilfields with collaboration of multinational oil and gas companies. The last discoveries were made at Mattani near Peshawar and Darra-i-Tang in Lakhi district close to the Mianwali district of Punjab. Exploitation and production activities in these oil and gas fields are yet to be started. Moreover, the previous central government did not extend cooperation to the previous PTI government in KP to establish an oil refinery at Karak.
The PTI government in the centre has also taken cognizance of growing demand for oil and gas and their shrinking supplies by taking immediate measures to boost local production and gradually decrease dependence on oil imports. The government is now set to hold a bidding round for 20 new exploration blocks in a bid to boost oil and gas production in the country. The Ministry of Energy has selected 41 new blocks and is seeking clearance from the Ministry of Defense. Energy Ministry officials have revealed that the defense ministry has already given go-ahead for 20 blocks and the new government is likely to hold bidding next month for awarding exploration licenses for these blocks. At present Pakistan produces around 4 billion cubic feet of gas and 86000 barrel of crude oil per day. The oil production meets 50 percent consumption demand.
The PML-N government did not award any block to exploration and production companies. It made a shady deal of Liquefied Natural Gas (LNG) import with Qatar at a price of $ 11 mbtu as opposed to international price of $ 6-7 mbtu. It ignored the exploration and exploitation of country’s hydrocarbon deposits, inviting criticism from the oil and gas rich provinces of KP, Sindh and Baluchistan. Former caretaker minister for foreign and maritime affairs, Abdullah Hussain Haroon had told business leaders in Karachi that an American Oil and Gas Company, Axim Mobil has discovered a reserve of oil and gas in Baluchistan near the Iranian border which is bigger than that of Kuwait.
Oil rich provinces argued that the previous central government failure to auction exploration blocks over the past four years had hindered the search for oil and gas. It further caused losses of billion of rupees to the provincial governments in the shape of loss of royalty and gas development surcharge. KP had pointed out that not even a single block had been put up for auction since 2014 out of 35 identified sites. Lease agreements struck before 2012 had also expired and were not renewed. This caused more than Rs. 20 billion in royalty earning to the federal government whereas provincial government lost Rs. 8.8 billion in a single year due to low petroleum production. Criminal neglect of the past five years in oil and gas exploration reflects the lack of national thinking.
Pakistan’s current gas production of 4 billion cubic feet per day (bcfd) is expected to decline to about 2.260 bcfd by 2021. At the same time consumption demand is estimated at 5.395 bcfd—about 29 percent higher the current supply. The demand for gas consumption will rise beyond 8 bcfd by 2021. Hopefully, the focus would now be more on oil and gas exploration project more than the politically motivated supply projects.
