ISLAMABAD   -  The Federal Petroleum Division Minister Musadik Malik has said that major international oil and gas companies are leaving Pakistan due to security reasons and unconducive business environment.

However, he said that discussions are underway with two Chinese companies for investment in Pakistan’s onshore and offshore. The minister made these revelations while briefing the National Assembly Standing Committee on Petroleum Division. The committee met under the chairmanship of Syed Mustafa Mehmood.

Secretary Petroleum Momin Agha, while briefing the committee, said that the government has tested Russian crude oil, now the private sector is bringing it. There is a $60 per barrel cap on Russian crude oil, and if it is bought above this, American sanctions will come into effect, the secretary said.

While replying to the questions raised by the committee regarding losses in Sui companies, Director General (DG) Gas replied that there are 12 percent losses in Sui Southern Gas Company (SSGC) and six percent in Sui Northern Gas Pipeline Limited (SNGPL).

DG Gas, while briefing the committee, said that in the country annual gas theft amounts to Rs40 billion. The total gas theft is more than Rs25 billion on SSGC’s network, he said. The gas sector’s circular debt is Rs2 trillion, DG Gas said. DG Gas further said that selling LNG is becoming a problem for us. The power sector will either have to pick up the entire LNG or find a solution, he added. While briefing the committee, Musadiq Malik said that major oil and gas companies are leaving Pakistan. The committee inquired that why large companies are leaving Pakistan? The minister replied that international companies prioritise where business is easier.

“Security costs are also an issue for oil and gas exploration in Pakistan,” the minister added. In regions where companies exploring oil and gas reserves, the security and its related cost is also an issue. Musadik Malik said work is also underway on a new policy regarding oil and gas exploration. In the country, 27 percent of the people obtain gas while five percent of the people obtain LPG, he added.

“The Petroleum Division should present its five-year plan,” Asad Alam Niazi said. Another member of the committee complained that in gas-producing companies operating in the areas do not take the relevant MNAs in confidence. Director General (DG) Petroleum Concessions (PC) Kashif Ali informed the committee that 149 licenses have been issued in the country so far for oil and gas exploration. To date, a total of 467 discoveries have been made in the country, including 96 oil discoveries and 371 gas discoveries.

“There is a need to increase local oil and gas exploration in Pakistan,” said Musadik Malik. Oil and gas production in the country continues to decline, he added. “The price of domestically produced gas in the country ranges from $6 to $9 per cubic metre,” according to DGPC. Petroleum Minister Musadik Malik said that LNG supply is increasing globally. Qatar is expected to increase LNG supply by 33 percent next year. Australia is also increasing LNG supply, the minister said. There are cash flow issues related to fuel matters, and PSO is also facing difficulties in this regard, Musadik Malik said.

Petroleum Secretary Momin Agha said the country consumes 4.2 billion cubic feet of gas daily, including LNG. Total gas supply includes one billion cubic feet of LNG daily, Agha said. Around Rs130 billion in subsidies are given to small domestic gas consumers, the secretary informed. Local refineries in Pakistan are not meeting Euro V standards. They are using metals in petrol which should be addressed, as mixing metals in petrol is causing environmental pollution and cancer, committee chairman said.