ISLAMABAD: Chinese-owned United Energy Pakistan Limited (UEP) is grappling with an unprecedented around $300 million in unpaid receivables and delayed tax refunds, pushing the company into severe financial stress, triggering layoffs, and threatening its role in Pakistan’s energy supply.
United Energy Pakistan Limited (UEP), one of Pakistan’s largest foreign oil and gas producers, is facing an acute financial crisis as mounting unpaid receivables and delayed tax refunds continue to choke its cash flows, raising serious concerns over operational sustainability, workforce stability, and investor confidence.
A subsidiary of Hong Kong-based United Energy Group (UEG), UEP was formed after UEG acquired British Petroleum’s (BP) Pakistani assets in 2011. The company primarily engages in upstream oil and gas exploration and production across Sindh, managing both onshore and offshore assets.
Through UEP Wind Power, the company also operates a 99 MW wind energy project in the Jhimpir wind corridor, a China-Pakistan Economic Corridor (CPEC) initiative. This facility was recently acquired by Chinese state-owned CNNP Rich Energy.
UEP’s workforce is entirely Pakistani, including senior leadership positions, showcasing strong local integration and the company’s role as a model of Pakistan-China economic collaboration.
Sources told Profit, that the financial crisis at UEP has intensified due to unpaid receivables now standing at approximately $300 million, compounded by delays in tax refund disbursements. The company has already been forced to lay off seventy employees across multiple positions as cash flow constraints bite deep.
Out of total pending tax refunds of roughly Rs 87 billion, Rs 21 billion has been released to Sui Southern Gas Company Limited (SSGCL), but broader disbursement plans remain pending final approval from the Federal Board of Revenue (FBR). SSGCL has expressed willingness to settle UEP’s dues but is waiting for refund releases and clear regulatory directives.
UEP’s total receivables had previously reached nearly $400 million, creating severe liquidity stress. Following intervention by the Special Investment Facilitation Council (SIFC), partial payments of around $100 million were made, providing temporary relief. However, the remaining $300 million continues to pressure the company’s financial position.
Sources highlighted that delayed payments are already affecting production planning, capital expenditure, and workforce stability. UEP, which produces about 7,800 barrels of crude oil per day, 50 tons of LPG daily, and approximately 266 million cubic feet per day of natural gas, warned that sustained cash flow constraints could disrupt operations and future exploration projects.
The issue has raised concern at senior policy levels, as prolonged delays in clearing undisputed tax refunds and receivables risk undermining foreign investment in Pakistan’s upstream energy sector. Officials stressed that the matter should be treated as a priority case between the taxpayer and FBR, with urgent resolution mechanisms implemented instead of being tied to broader government-wide settlement plans.
Industry sources warned that unless receivables and refunds are promptly cleared, UEP’s financial difficulties could threaten production continuity, delay new exploration, and weaken Pakistan’s credibility as a destination for foreign investment, ultimately affecting the country’s long-term energy security.
The President of UEP was contacted for comments but remained silent despite repeated attempts to reach him.
