Kuwait Foreign Petroleum Exploration Company (KUFPEC) has begun its exit from Pakistan’s oil and gas sector, citing extensive circular debt and prolonged policy delays by the government.
The News International reported, quoting official sources from the Ministry of Energy, that KUFPEC, a subsidiary of Kuwait Petroleum Corporation, is selling its assets worth nearly $60 million in several blocks across Pakistan to Pakistan Exploration (Private) Limited (PEL) to reinvest in other countries.
“The growing circular debt in the gas sector, now at Rs2,700 billion, is a major factor driving foreign E&P companies out of Pakistan,” the official said.
Of this debt, Rs1,500 billion, including $600 million owed to local and foreign Exploration and Production (E&P) companies, remains unpaid due to defaults by gas companies. A 12-month delay in approving amendments to the 2012 E&P policy also influenced KUFPEC’s decision.
In November 2023, KUFPEC announced Memorandums of Understanding (MoUs) with Pakistani companies, including Oil and Gas Development Company Limited (OGDCL) and Mari Petroleum Company Limited (MPCL). These agreements aimed to enhance KUFPEC’s exploration portfolio and asset value in Pakistan.
At the time, KUFPEC CEO Mohammad Al-Haimer highlighted the potential for knowledge exchange and strategic partnership expansion in the country.
Despite these commitments, KUFPEC’s decision to sell its assets has raised concerns among policymakers. PEL, which confirmed the acquisition, declined to disclose the exact asset value due to non-disclosure agreements but stated that advance payments had been made.
According to a press release from PEL, the acquisition includes assets in the Dadu, Kirthar, Tajjal, and Qadirpur concessions, along with the Bhit and Qadirpur leases.
“This strategic acquisition strengthens our presence in Pakistan’s energy sector and aligns with our long-term strategy to explore the country’s energy potential,” PEL stated.
Established in 1981, KUFPEC operates in 10 countries across five continents, focusing on the exploration and development of crude oil and natural gas outside Kuwait.
