ISLAMABAD: Over one-third of the newly discovered gas reserves would be sold to private companies, a high-level committee decided on Monday.

The decision by the committee, led by Deputy Prime Minister Ishaq Dar, came after almost a year-long resistance from government-owned gas companies over this issue.

The committee decided to sell 35pc of new gas finds to third-party private entities through a bidding process to ease liquidity challenges of the exploration and production (E&P) companies and attract $4-5bn fresh investment in offshore exploration, said a statement from the deputy PM’s office.

The proposal to sell “35pc of the unallocated gas volumes” would now be submitted to the Executive Committee of the National Economic Council (Ecnec).

Committee led by deputy PM approves decision made by CCI in Jan

The proposal included a 100 million standard cubic feet per day cap for the first year, with annual reviews thereafter, as per the statement.

Ecnec will meet on Tuesday to approve the framework.

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In January, the Council of Common Interests (CCI) — comprising chief ministers of all four provinces — had decided to allow E&P companies to sell the reserves to third parties.

The CCI asked the gas companies and the petroleum division to prepare a framework for the sale of 35pc of unallocated gas to third parties and get it approved by the Ecnec. The decision was yet to be implemented after 11 months.

The two public sector gas utilities — SNGPL and SSGC — have been delaying the implementation and have since been lobbying to reverse the CCI decision.

During the meeting on Monday, Mr Dar said neither the CCI decision could be reversed nor a prospective investment of about $4-5bn in offshore blocks could be postponed.

The committee, headed by Mr Dar, was formed by Prime Minister Shehbaz Sharif “to develop a comprehensive action plan for addressing the challenges faced by the Exploration and Production (E&P) sector in Pakistan”.

The meeting decided to initiate a bidding round for available onshore exploration blocks by December, with a bid submission deadline of March 15, 2025.

“In parallel, a separate bidding process will be launched for offshore exploration blocks, with a six-month period allowed for potential bidders to evaluate the offered blocks and make their bids by June 30, 2025.”

The committee was also updated on the ongoing digitalisation in the Directorate General of Petroleum Concessions (DGPC).

A competitive process has been initiated to advance the digital transformation, which will streamline operations and enhance efficiency.

Additionally, the committee was informed about the launch of an Integrated Energy Modelling Study, conducted by internationally recognised consultants. The study will focus on the role of oil, gas, and LPG in Pakistan’s energy mix; provide insights into supply-demand dynamics; and develop a comprehensive gas market model.

The findings, expected to inform policy decisions on gas supply management for priority sectors, will be presented in a draft report due in January 2025.

Published in Dawn, November 19th, 2024