Govt to auction 20 offshore blocks for oil and gas exploration

The federal government has planned to auction 20 offshore blocks for oil and gas exploration in a bid to address the country’s growing energy needs, Petroleum Minister Musadik Malik informed the National Assembly’s Standing Committee on Energy. 

During the committee’s meeting, chaired by Syed Mustafa Mehmood, Malik also announced that the government was intensifying onshore tight gas exploration efforts. New incentives have been introduced to attract companies, as previous policies made exploration costly and unfeasible. 

He highlighted the challenges of horizontal drilling in tight gas exploration, noting that while it is expensive, work has already begun on some wells.

The minister outlined the government’s strategy to boost energy resources amid the ongoing energy crisis. This will be the first time offshore blocks are auctioned, with hopes of uncovering new reserves.

Malik also addressed concerns regarding the management of state-owned companies, confirming that three subsidiary companies of the Petroleum Division have been transferred to the Sovereign Wealth Fund. He reassured the committee that there are no plans to dissolve the fund, despite some members’ concerns.

In a broader discussion on the gas sector, the Petroleum Minister reported a reduction in sector losses due to the installation of new Town Border Stations (TBS) designed to combat gas theft. Employees overseeing these stations are responsible for providing profit and loss data to the company. 

However, Malik noted that supplying gas to captive power plants is currently unfeasible due to restrictions from the International Monetary Fund (IMF). He added that K-Electric’s power costs are three times higher than the indigenous gas used by these plants.

The petroleum sector’s circular debt is nearing Rs3 trillion, Malik disclosed. He noted a sharp decline in indigenous gas supplies, with exploration and production companies failing to make significant new discoveries. 

The committee stressed the need for efficient natural gas distribution and stricter monitoring to reduce line losses. Future meetings will focus on Corporate Social Responsibility (CSR) initiatives by both public and private oil and gas companies.