- KUFPEC “recoup 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 main assets to Pakistan Exploration (Private) Limited (PEL) for about $60 million, according to a senior official of the Ministry of Energy who spoke with The news on Mondays.
“Foreign exploration and production companies are increasingly discouraged, mainly due to the huge circular debt in the gas sector, which has reached Rs 2,700 crore,” the source told the publication.
“Of this, Rs 1,500 billion, including $600 million owed to local and foreign exploration and production (E&P) companies, remain unpaid due to non-payments by gas companies. The 12-month delay in passing amendments to the 2012 E&P policy also contributed to the KUFPEC decision,” the source said.
According to the official, KUFPEC has taken a decision to recover its investments by selling its concessions and assets in different blocks around Pakistan to reinvest in other countries.
In April 1981, KUFPEC was founded as a division of Kuwait Petroleum Corporation (KPC). The company’s main objective is to find, develop and extract natural gas and crude oil outside of Kuwait. It has operations in ten countries on five continents: Europe, Asia, Africa, North America and Australia.
Notably, KUFPEC stated in a press release dated November 23, 2023 that it has signed memoranda of understanding (MoU) with several Pakistani corporations 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.
KUFPEC CEO Mohammad Al-Haimer stated 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 KUFPEC assets, reviews independent peer-to-peer, knowledge sharing and use of experience. of our global partners.”
However, barely a year later, KUFPEC’s decision to sell its assets and concessions has raised serious concerns among Pakistani policymakers. When contacted, PEL confirmed the acquisition and stated, “Yes, we have acquired the assets of KUFPEC Pakistan after winning the bid.”
However, the company refused to disclose the value of the assets, citing non-disclosure agreement (NDA) obligations. PEL also confirmed having made advance payments to KUFPEC. According to a press release on PEL’s website, the acquisition includes assets in the Dadu, Kirthar, Tajjal and Qadirpur concessions in Pakistan, along with the Bhit and Qadirpur leases.
“This strategic acquisition marks an important milestone for PEL as it expands its exploration portfolio and strengthens its presence in Pakistan’s energy sector. “It underlines PEL’s commitment to discovering and harnessing the country’s energy potential,” the statement said.
The acquisition aligns with PEL’s long-term strategy to explore energy opportunities and unlock 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.
