Every other day, Pakistan faces some kind of setback. Economic and financial ones are more frequent than any other; the recent decision of ExxonMobil to pull out of a project in Pakistan for LNG imports to minimize winter shortages is another straw in the haystack. The reason stated for Exxon to quit is its issues with partners.
With the decision to leave the project, Exxon has increased the problems for the government in meeting the demands of the energy sector; both domestic and commercial. Though it is not that Islamabad has lost it all, many regional energy companies and groups dealing in petroleum and related commodities are willing to replace Exxon and provide their services. The government should take swift measures to bring the situation under control.
While the company is trying to join a separate project in Pakistan, the government should be wary of its past record of not honouring the agreements and violating environmental laws, which have led several disaster and endless litigation for client states.
Furthermore, there are other elements to dealing with Exxon. The company has been pliant to the directions White House issues regarding its foreign policy. The recent pull out can be seen as a tactic to force Pakistan into accepting American demands, especially the company made its decision after Pakistan showed an icy response to the Rex Tillerson, who was CEO of this company till 2016.
Even if Exxon’s decision was purely based on commercial issues, the government would be better served if it opts for regional companies, who will have a greater stake in the region instead of commitments worldwide.
Pakistan has all the potentials to overcome the energy crisis if the state takes steps in the right directions. Given the infrastructure and the huge industrial demands, Pakistan can prove a lucrative marketplace for companies of the countries that are regional. However, to avoid such fateful deals the government needs to take at least the parliament in confidence whenever such a deal is brokered.