Islamabad: The import of LNG (Liquefied Natural Gas) has once again started impacting the local oil and gas industry, with exploration companies incurring a loss of $192 million over the past four months.
Following the LNG imports, gas utilities have reduced the supply from local fields operated by exploration companies. According to sources, the total reduction in gas supply amounts to 329 million cubic feet per day (mmcfd), resulting in a monthly loss of $48 million.
Industry officials state that the cumulative effects of this loss have reached $192 million over the last four months. Additionally, due to the reduction in gas supply, crude oil production has been halted, resulting in a further loss of 5 billion rupees.
Officials also mentioned that the cost of the 329 mmcfd of LNG imported over this four-month period was $500 million. They claimed that the lack of tax collection caused a further loss of 20 billion rupees to the national treasury. Oil and gas exploration companies have reported significant losses, with OGDC facing a loss of nearly $8 million over the past eight weeks.
OGDC’s gas production has dropped to 1,461 mmcfd, crude oil production is down to 26,394 barrels, and LPG production has fallen to 1,391 metric tons. PPL has also highlighted the negative impact of reduced production on field development plans and operational longevity.
The continued decline in gas supply, with no clear solution in sight, has created a negative environment for investment, eroding stakeholders’ confidence in the energy sector.
Industry officials warn that Pakistan’s energy sector is heading toward a crisis, as both local and international investors express frustration with the decline in gas production and mismanagement of the sector. This situation further compounds the already existing challenges in Pakistan’s energy sector, which is facing a significant reduction in local gas production.
Data indicates that production has decreased by 50 mmcfd from Sui, 25 mmcfd from Qadirpur, 70 mmcfd from Ghazi and HRL, 45 mmcfd from Nashpa, and 15 mmcfd from Dhoke Hussain.
Internal sources within the industry suggest that these reductions are being made to create room for the import of expensive LNG. This strategy is viewed as a direct affront to both local and international investors in Pakistan’s upstream energy sector.
Officials assert that the reduction in local gas supply is not only an economic mistake but also a strategic blunder, as Pakistan’s increasing reliance on LNG imports is financially and geographically costly, with the country becoming increasingly dependent on foreign suppliers.
