ISLAMABAD: Local and international firms in oil and gas exploration and production (E&P) sector have expressed strong interest in investing over $5 billion in the country’s energy sector in the next three years.
This surge in investor confidence is attributed to recent amendments in the Petroleum Policy and the introduction of an exclusive Tight Gas Policy, offering enhanced incentives and a more investor-friendly regulatory framework.
These strategic reforms are set to unlock new opportunities, bolster domestic energy production, and attract significant foreign and local investment.
According to official documents, during the last one year, the revision of gas prices has significantly stabilized the financial health of key entities like Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC), ensuring uninterrupted gas supplies across industrial and domestic sectors.
The inclusion of RLNG (Re-gasified Liquefied Natural Gas) diversion in revenue requirements has effectively curbed the accumulation of tariff differentials, further streamlining the energy sector’s finances. The allocation of gas from newly discovered reserves has enabled Sui companies to mitigate the impact of natural depletion, supporting the growing demand during critical winter months.
In a landmark move, the signing of the Consortium Agreement for the Machike-Thalian-Taru Jabba White Oil Pipeline Project on September 4, 2024, underscores the government’s commitment to achieving self-sufficiency in oil, gas, and mineral supply.
The Petroleum Division’s vision emphasizes fostering an investor-friendly environment through progressive policies, advanced technologies, and effective regulatory frameworks.
Once grappling with challenges such as declining exploration, outdated policies, and circular debt, the ministry has embarked on comprehensive reforms. These include allowing E&P companies to sell up to 35% of their production to third parties, thereby liberalizing the market and improving cash flows. A new high-risk exploration Zone 1(F) was introduced with higher gas pricing incentives, while the Tight Gas Policy 2024 offers enhanced benefits to encourage tight gas exploration.
International consultancy firms such as DeGolyer and MacNaughton and Wood Mackenzie have been engaged to integrate Geological & Geophysical (G&G) data and develop offshore bid rounds.
Collaboration with the World Bank has resulted in the development of a cash flow monitoring system and circular debt management dashboard.
The Petroleum Division has also prioritized gas allocation reforms, placing industries on par with domestic users, ensuring stable supplies, and averting the need for urea imports by guaranteeing fertilizer plant operations. Meanwhile, stringent regulations have been enforced to curb the illegal import and sale of hazardous petroleum products.
In the mineral sector, international consultants are aligning laws with global standards, with completion targeted by mid-2025. Successful resolution of the Reko Diq dispute has attracted potential Saudi investment, while initiatives in coal gasification and gemstone exploration are boosting economic opportunities, particularly in Gilgit-Baltistan and Balochistan.
Geological Survey of Pakistan (GSP) projects have covered 51,200 sq. km of geological mapping and executed six geophysical surveys, providing critical data for mineral exploration, mining, and infrastructure development. These initiatives have not only enhanced scientific understanding but also created employment opportunities in remote areas, contributing to socio-economic development.
From January 2024 to December 2025, Pakistan collected substantial revenues: Rs 54.7 billion in oil royalties, Rs 1.46 billion in gas royalties, and Rs 2.07 billion in production bonuses, among other sources. To support gas sector development, Rs. 1.16 billion was allocated for extending gasification within 5 km of producing fields, and Rs 10 billion was budgeted to cover RLNG supply differentials for domestic consumers.
SSGCL and SNGPL have successfully expanded their networks, including a 230 km pipeline under the Shaheed Fahad Ashfaq Project, and installed over 20,000 new gas connections. These efforts have significantly improved gas accessibility and infrastructure nationwide.
By addressing long-standing challenges and fostering strategic reforms, Pakistan’s energy sector is now poised for sustainable growth, contributing to energy security and economic development.
