Pakistan to Attract $5 Billion Foreign Investment in Oil and Gas Sector

The government of Pakistan has come up with a plan to attract foreign direct investment (FDI) under the (Public Sector Development Program) PSDP Plus regime.

It will attract a $5 billion investment in the oil and gas sector under the regime developed by the Prime Minister Office said the media reports. All ministries have finalized their projects for investment from abroad to this effect.

According to the reports, the Ministry of Energy has sent the information about PSDP Plus to all Pakistan’s embassies and high commissions abroad in order to convince the foreign companies for the investment under the new plan. The commercial and trade officers will circulate the information among relevant companies in respective countries and actively pursue their investment in the upstream and downstream sectors of Pakistan.

In order to enhance the economic base and generate job opportunities for the youth, Pakistan is trying its best to attract FDI in various fields.

The Prime Minister Office has developed the PSDP Plus to attract investment in projects designed by the ministries on the Public-Private Partnership (PPP) mode of financing. Pakistan’s upstream and midstream sectors provide opportunities in E&P related activities as the country has enormous untapped hydrocarbon potential.

The E&P (Exploration and Production) companies from Kuwait and Canada which invested $60 million in Badin-IV well were discouraged when they were denied the rate of 25 cents per MMBTU which was allowed in the petroleum policy.

According to the documents, the government is going to launch this regime to create jobs that are badly needed particularly in the prevailing abnormal situation that emerged out of COVID-19.

Pakistan has huge hydrocarbon potential most of which is still untapped. The technical evaluations reveal that the original recoverable reserves stood at 1,246,877 million barrels of oil and 57.436 trillion cubic feet (Tcf) of gas. The currently recoverable reserves are 347.878 million barrels of oil and 19.541 Tcf of gas.

Pakistan has a large sedimentary area of 827,268 square kilometers in which only 1094 exploratory and 1443 appraisal and development wells have been drilled so far with an average well drilling density of 3 wells per 1000 square kilometers. These wells have resulted in 394 discoveries with a ratio of 1:2.80 which is quite attractive.

In Pakistan, there are three-zone and gas well-head prices. Zone-I prices stand at $6.6 per MMBTU, for Zone-II $6.3 per MMBTU and Zone-III $6 per MMBTU and for offshore drilling the gas price is fixed at $7 per MMBTU for wells at a shallow level, $8 per MMBTU for deep and $9 per MMBTU for ultra-deep wells.