Oil and gas sector wants govt to clear Rs1.5tr dues

The oil and gas exploration companies have warned the government that their financial default was eminent as the outstanding amount against the state has almost reached Rs1.5 trillion. The Pakistan Petroleum Exploration and Production Companies Association (PPEPCA) has written to Petroleum Minister Musadik Malik stating that the upstream oil and gas sector is in a critical situation. “Our industry is confronting a complex array of challenges that require urgent action. The alarming amount of outstanding receivables from SSGC and SNGPL currently stands at Rs1.5tr, of which over $600 million is payable to foreign companies,” the PPEPCA letter said. It added that delayed payments were a significant barrier to upstream companies’ ability to invest in their assets. The association has said that as a result of these delays, Pakistan was witnessing a marked decline in indigenous oil and gas production. The shortfall was being balanced by costly energy imports, especially LNG, as well as growing energy shortages.