- KUFPEC will “recover its investments” by selling assets.
- The company’s decision has raised serious concerns among policymakers.
- PEL also confirms having made advance payments to KUFPEC.
ISLAMABAD: Kuwait Foreign Petroleum Exploration Company (KUFPEC) has started the process of exiting Pakistan’s oil and gas sector by selling its major assets to Pakistan Exploration (Private) Limited (PEL) for around $60 million, according to a senior official of the Ministry of Energy who spoke to News Monday.
“Foreign E&P companies are becoming increasingly discouraged, mainly due to the massive circular debt in the gas sector, which has reached Rs 2.7 trillion,” the source told the publication.
“Of this, Rs1.5 trillion, including $600 million owed to local and foreign exploration and production (E&P) companies, remains unpaid due to defaults by gas companies. The 12-month delay in approving amendments to the 2012 exploration and production policy also contributed to KUFPEC’s decision,” the source said.
According to the official, KUFPEC has taken the decision to recover its investments by selling its concessions and assets in different blocks around Pakistan in order to reinvest in other countries.
In April 1981, KUFPEC was founded as a division of Kuwait Petroleum Corporation (KPC). The Company’s primary objective is to find, develop and extract natural gas and crude oil outside Kuwait. It is present in ten countries on five continents: Europe, Asia, Africa, North America and Australia.
Notably, KUFPEC said in a press release dated November 23, 2023 that it has signed Memoranda of Understanding (MoU) with several Pakistani companies, including Prime Pakistan Limited, Mari Petroleum Company Limited (MPCL) and Oil and Gas Development Company Limited (OGDCL). ). The objective of the MoUs was to enhance KUFPEC’s exploration portfolio, strategic alliances and asset value in Pakistan.
Mohammad Al-Haimer, CEO of KUFPEC, said at the time: “The MoUs are not limited to strengthening strategic partnerships to expand our exploration portfolio in Pakistan, but also provide significant opportunities to enhance the KUFPEC assets, independent peer reviews, knowledge exchange and use of expertise. from our global partners.
However, barely a year later, KUFPEC’s decision to sell its assets and concessions has raised serious concerns among Pakistan’s policymakers. When contacted, PEL confirmed the acquisition saying, “Yes, we have acquired the assets of KUFPEC Pakistan after winning the bid. »
However, the company refused to disclose the value of the asset, citing the obligations of a non-disclosure agreement (NDA). PEL also confirmed that it had made advance payments to KUFPEC. According to a press release published on PEL’s website, the acquisition includes the assets of the Pakistani concessions of Dadu, Kirthar, Tajjal and Qadirpur, as well as the leases of Bhit and Qadirpur.
“This strategic acquisition marks an important milestone for PEL as it expands its exploration portfolio and strengthens its presence in Pakistan’s energy sector. This underlines PEL’s commitment to discovering and harnessing the country’s energy potential,” the statement said.
The acquisition is part of PEL’s long-term strategy to explore energy opportunities and exploit Pakistan’s vast natural resources. “We are confident that these assets will help us meet Pakistan’s growing energy demand,” PEL said.
PEL reiterated its commitment to the exploration and development of Pakistan’s natural resources and its role in contributing to the country’s energy security and sustainable growth.