Pakistan’s petroleum sector is witnessing a surge in foreign investment, as Turkish and Azerbaijani firms make significant strides in the country’s upstream sector.
According to reports, Turkish Petroleum Overseas Company (TPOC), a subsidiary of Turkish Petroleum (TPAO), has signed five new petroleum concession agreements with leading Pakistani exploration and production (E&P) companies, including OGDCL, PPL, GHPL, Mari Energies, and Prime Pakistan. The total investment for these agreements is estimated at approximately $300 million.
This strategic move by TPOC, covering both offshore and onshore blocks, comes at a time when Pakistan is working to enhance its energy security and attract foreign capital.
The agreements underscore growing confidence in Pakistan’s energy landscape and the country’s potential to serve as an attractive investment destination for international companies.
In addition, a technical delegation from SOCAR, Azerbaijan’s state-owned oil company, is scheduled to visit Pakistan on December 8 to explore opportunities for collaboration in upstream exploration.
The discussions will focus on both onshore and offshore exploration, licensing, and potential joint ventures with Pakistani firms, further enhancing bilateral cooperation in the energy sector.
Pakistan’s energy sector is experiencing a revitalization following government-led interventions aimed at stabilizing the gas industry and boosting investor confidence. Over the past seven months, gas utilities have resumed payments to exploration and production (E&P) companies for their recent invoices, marking a significant shift.
The government has also secured the diversion of 11 LNG cargoes, valued at $230 million, for 2025, and another 35 cargoes worth $1 billion for 2026. These efforts have strengthened the liquidity of the gas sector, enabling E&P companies to restart exploration activities that had slowed in recent years.
One of the most significant outcomes of these measures is the expected end of the longstanding gas curtailment of over 300 million cubic feet per day (mmcfd) by January 2026, which will improve the domestic energy supply outlook.
This positive momentum comes after years of challenges, including under-utilization of expensive imported LNG. Pakistan had long-term LNG supply agreements, but since 2019, the power sector consumed significantly less RLNG than contracted, prompting the government to divert imported gas to domestic consumers at a financial loss. The fiscal impact of this diversion has exceeded Rs1 trillion, including Rs242 billion in the last fiscal year alone.
The planned diversion of 35 LNG cargoes in 2026 to international markets is expected to reduce the import bill by over $1 billion, ensuring that domestic consumers use cheaper local gas priced at Rs1,000 per MMBTU, rather than imported gas at Rs3,300 per MMBTU. This will also ease pressure on the circular debt, which currently stands at Rs2.6 trillion.
