Prime Minister Shahbaz Sharif has taken a significant step towards revitalizing Pakistan’s oil and gas sector by directing the Petroleum Division and Finance Division to prepare a comprehensive plan for selling minority stakes, including management control, to a Gulf Cooperation Council (GCC)-based strategic investor. This directive came during a meeting held on June 25, where the prime minister underscored the importance of attracting foreign investment to bolster the sector.
The prime minister has tasked the Petroleum Division with presenting this strategy at the relevant forum for thorough deliberations. Additionally, he has instructed the Petroleum Division to transform the sectoral strategy, previously presented by the Minister of Petroleum and the Secretary of Petroleum, into a detailed matrix. This matrix will outline specific deliverables, timelines, and responsibilities, and will also incorporate interventions in the mineral sector.
In an effort to leverage China’s experience and best practices, Prime Minister Sharif has directed the Petroleum Division to develop and finalize a policy framework for Thar coal gasification within one month. This initiative aims to harness the potential of Thar coal and reduce Pakistan’s reliance on expensive energy imports.
To further this goal, the Ministry of Foreign Affairs, the Board of Investment, and the Petroleum Division will organize interactions between Exploration and Production (E&P) companies and the prime minister. This will culminate in a Petroleum Conference, attended by industry leaders, with the clear objective of attracting maximum investment into the sector.
The Finance Division, State Bank of Pakistan, Petroleum Division, and Power Division have been tasked with engaging financial institutions to review and potentially revise their current policies on financing coal projects. This move is aimed at securing the necessary funding for energy projects, particularly those involving Thar coal.
Pakistan Railways, the Petroleum Division, the Planning, Development & Special Initiatives (PD&SI) Division, and the Government of Sindh have been instructed to expedite approvals for Thar coal connectivity, including its financing model. The railway project, crucial for transporting Thar coal, must commence and be completed before the availability of additional Thar coal intended to replace imported coal. A separate presentation on the railway line for Thar coal transportation will be made to the prime minister.
In an effort to curb Unaccounted For Gas (UFG) losses, a meeting will be held to review, fast-track, and complete the installation of 5,586 meters on Town Border Stations (TBSs) by December 31, 2024. Separate presentations by gas utilities will be scheduled to ensure the effective implementation of this plan.
A committee headed by the Petroleum Minister has been given a two-week timeline, starting from June 25, 2024, to finalize and submit recommendations on the implementation of Weighted Average Cost of Gas (WACOG) without any further delay.
Furthermore, the Petroleum Division is expected to develop a concrete plan with specific deliverables and timelines to liberalize and deregulate the oil and gas sector. This includes reconceiving the marketplace for Petroleum, Oil, and Lubricants (POL) products, gas, Liquefied Petroleum Gas (LPG), and Liquefied Natural Gas (LNG), privatizing publicly traded companies, and developing a wholesale market.
The Petroleum Division will also collate and examine data shared by the Power Division regarding captive power plants. A plan to move captive power to the national grid, complete with deliverables and timelines, is to be furnished within a month.
