By Energy Correspondent
Kuwait Foreign Petroleum Exploration Company (KUFPEC) has begun its exit from Pakistan’s Gil and Gas sector, citing extensive circular debt and prolonged policy delays by the Government. Media 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 Rs.2,700 billion, is a major factor driving foreign E&P companies out of Pakistan,” an official stated. Of this debt, Rs1,500 billion, including $600 million owed to local and foreign Exploration and Production companies, remains unpaid due to defaults by Gas marketing companies. A 12-month delay in approving amendments to the 2012 E&P Policy also influenced KUFPEC’s decision.
In the month of 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 of 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. In a message, PEL stated, “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,”
Kuwait Foreign Petroleum Exploration Company (KUFPEC) is an international upstream company. KUFPEC is a subsidiary of Kuwait Petroleum Corporation (KPC) and was founded in April 1981. The organization is involved in the exploration, develoment of Crude Oil and Natural Gas outside Kuwait’s borders. KUFPEC operates in 10 nations across five continents, including Australia, Asia, Africa, North America, and Europe.
