ISLAMABAD: Pakistan on Thursday signed agreements to issue new licenses for oil exploration in the country, the ministry of petroleum said, with the projects aimed at attracting investment and meeting growing energy requirements.
“Government of Pakistan today [Thursday] executed Petroleum Concessions (PCAs) and Exploration Licences (ELs) of critical Blocks in the provinces of Sindh and Balochistan,” the ministry of petroleum said in a statement.
The statement quoted Omar Ayub Khan, Federal Minister for Petroleum, as saying the agreements, signed in Islamabad, were part of the incumbent government’s reform agenda and efforts to attract investment in the petroleum sector.
The exploration blocks are located in the province of Sindh and Balochistan and involve the Oil and Gas Development Company and Pakistan Petroleum Limited.
“The minimum firm work commitment for these blocks is US $ 13.61 million for a period of three years,” the statement said. “The companies entering into agreements today [Thursday] would be obligated to spend a minimum of US $ 30,000/year in each block.”
Last month, the consortium exploring the Kekra-1 well off the coast of Pakistan ended drilling operations after no reserves of oil and gas were found, said a spokesman for Oil and Gas Development Co. Ltd, one of the Pakistani partners, along with Italy’s ENI SpA and Exxon Mobile Corp.
News that the project was abandoned came as a blow to the government of Prime Minister Imran Khan which had pinned high hopes on offshore oil and gas discoveries to help with both the country’s chronic energy deficiencies and its ballooning trade deficit.
Pakistan is believed to have rich mineral resources, with conventional gas reserves estimated at 20 trillion cubic feet (tcf), or 560 billion cubic meters, and shale gas reserves, which are so far untouched, at more than 100 tcf.
The government is planning to offer dozens of new gas field concessions, hoping that improved security in recent years will reassure foreign investors who have been deterred in the past by the threat of militant violence.
Pakistan has been under mounting pressure to shore up its creaking energy infrastructure, both to provide more reliable supplies of oil and gas to its growing population of more than 200 million and to cut reliance on expensive foreign imports.
The country recently signed an accord for a $6 billion loan from the International Monetary Fund that helped send its rupee currency to an all time low and highlighted the need to cut import bills.
Pakistan issues new licenses for oil exploration in Sindh, Balochistan provinces
Pakistan issues new licenses for oil exploration in Sindh, Balochistan provinces
- Petroleum minister says new deals part of government's reform agenda, efforts to attract petroleum investment
- Pakistan has been under mounting pressure to shore up its creaking energy infrastructure
Pakistan, ADB sign $730 loan agreements to boost SOE reforms, energy infrastructure
- Both sign $330 million Power Transmission Strengthening Project and $400 million SOE Transformation Program loan agreements
- Economic Affairs Division official says Transmission Project will secure Pakistan’s energy future by strengthening national grid’s backbone
KARACHI: Pakistan and the Asian Development Bank (ADB) on Thursday signed two loan agreements totaling $730 million to boost reforms in state-owned enterprises (SOEs) and energy infrastructure in the country, the bank said.
The first of the two agreements pertains to the SOE Transformation Program worth $400 million while the second loan, worth $330 million, is for a Power Transmission Strengthening Project, the lender said.
The agreements were signed by ADB Country Director for Pakistan Emma Fan and Pakistan’s Secretary of Economic Affairs Division Humair Karim.
“The agreements demonstrate ADB’s enduring commitment to supporting sustainable and inclusive economic growth in Pakistan,” the ADB said.
Pakistan’s SOEs have incurred losses worth billions of dollars over the years due to financial mismanagement and corruption. These entities, including the country’s national airline Pakistan International Airlines, which was sold to a private group this week, have relied on subsequent government bailouts over the years to operate.
The ADB approved the $400 million loan for SOE reforms on Dec. 12. It said the program seeks to improve governance and optimize the performance of Pakistan’s commercial SOEs.
Karim highlighted that the Power Transmission Strengthening Project will enable reliable evacuation of 2,300 MW from Pakistan’s upcoming hydropower projects, relieve overloading of existing transmission lines and enhance resilience under contingency conditions, the Press Information Department (PID) said.
“The Secretary emphasized that both initiatives are transformative in nature as the Transmission Project will secure Pakistan’s energy future by strengthening the backbone of the national grid whereas the SOE Program will enhance transparency, efficiency and sustainability of state-owned enterprises nationwide,” the PID said.
The ADB has supported reforms by Pakistan to strengthen its public finance and social protection systems. It has also undertaken programs in the country to help with post-flood reconstruction, improve food security and social and human capital.
To date, ADB says it has committed 764 public sector loans, grants and technical assistance totaling $43.4 billion to Pakistan.
