Pakistan’s Energy Sector to Receive $5 Billion Investment Boost

Pakistan’s oil and gas exploration sector is set to receive a major boost, with local and international companies committing to invest over $5 billion in the next three years. This renewed investor confidence follows key amendments to the Petroleum Policy and the introduction of the Tight Gas Policy 2024, aimed at creating a more attractive business environment for exploration and production (E&P) firms.

Recent regulatory changes have provided enhanced incentives, unlocking new opportunities in the energy sector. Officials confirm that the revision of gas pricing mechanisms has significantly improved the financial stability of major companies, including Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC). These measures ensure uninterrupted gas supplies to both industrial and domestic sectors.

The Machike-Thalian-Taru Jabba White Oil Pipeline Project, signed on September 4, 2024, marks a significant step towards self-sufficiency in oil and gas supply. This initiative, along with newly implemented high-risk exploration zones and updated gas pricing structures, is expected to attract foreign and domestic investment at an unprecedented scale.

Strategic Industry Advancements

• E&P companies can now sell up to 35% of their production to third parties, increasing market competition.
• New exploration incentives offer higher gas pricing for investment in untapped reserves.
• Collaboration with global consultancy firms like DeGolyer and MacNaughton and Wood Mackenzie to enhance offshore exploration.
• World Bank-backed initiatives for circular debt management and cash flow monitoring to improve transparency.

To meet rising demand, gas allocation policies have been restructured, prioritizing industrial needs while ensuring fertilizer plants continue operations without disruption. The government has also intensified efforts to curb illegal fuel imports, ensuring safer energy supply chains.

The Geological Survey of Pakistan (GSP) has completed 51,200 sq. km of mapping and conducted six geophysical surveys, strengthening the foundation for mineral and energy exploration. Additionally, Pakistan has collected Rs. 54.7 billion in oil royalties, Rs. 1.46 billion in gas royalties, and Rs. 2.07 billion in production bonuses, reflecting strong revenue growth.