ISLAMABAD: Kuwait Foreign Petroleum Exploration Company (KUFPEC) has decided to withdraw from Pakistan’s oil and gas sector, selling key assets worth approximately $60 million to Pakistan Exploration (Private) Limited (PEL). This move marks the culmination of KUFPEC’s operations in the country, a senior official from the Ministry of Energy revealed.
The official explained that mounting challenges in the energy sector, including a staggering circular debt of Rs2,700 billion, were key factors behind the decision. Of this debt, Rs1,500 billion, including $600 million owed to local and foreign exploration and production companies, remains unpaid due to defaults by gas firms. Delays in amendments to the 2012 E&P policy further disheartened KUFPEC and influenced its exit.
KUFPEC, a subsidiary of Kuwait Petroleum Corporation established in 1981, specializes in the exploration and extraction of crude oil and natural gas worldwide. The company operates in 10 countries, spanning five continents. Despite recent efforts to strengthen its presence in Pakistan through Memorandums of Understanding (MoUs) with major local firms such as OGDCL and MPCL, KUFPEC opted to sell its assets and reinvest elsewhere.
PEL confirmed the acquisition, citing the addition of assets in Dadu, Kirthar, Tajjal, and Qadirpur concessions, along with the Bhit and Qadirpur leases. Although specific financial details remain undisclosed due to a non-disclosure agreement, PEL highlighted the strategic importance of the deal.
“This acquisition expands our exploration portfolio and reinforces our commitment to unlocking Pakistan’s energy potential,” PEL stated in a press release, emphasizing its role in addressing the country’s growing energy demands.
This transaction underscores the challenges faced by foreign investors in Pakistan’s energy sector, raising critical questions for policymakers about fostering a more favorable investment environment.
