Key Points
- Petroleum Minister stresses consistent and predictable energy policies for investors.
- Offshore exploration is being revived after two decades.
- Investors should retain profits and reinvest successful exploration earnings.
- Cabinet Committee on Energy has been reactivated for coordination.
- Petroleum Division cannot shoulder excessive taxation and financial interventions.
- Government says circular debt flow remains near zero.
ISLAMABAD: Pakistan’s Federal Minister for Petroleum Ali Pervaiz Malik on Thursday called for consistent and predictable energy policies to attract major investment in Pakistan’s upstream exploration sector, particularly offshore projects, saying investors making high-risk commitments need medium-term policy visibility.
Addressing the Energy Conference 2026, Minister Malik said Pakistan was reviving offshore exploration after two decades under the leadership of Prime Minister Shehbaz Sharif, with friendly countries as well as Mari Petroleum, Pakistan Petroleum Limited (PPL) and Oil and Gas Development Company Limited (OGDCL) participating in the initiative.
He said the government needed to create an environment in which investors could commit substantial capital to exploration without uncertainty over future policies.
“If we expect them to invest over a hundred million dollars for one well, we must provide them consistency of policy and medium-term visibility,” he said.
Backing reinvestment
The minister said successful explorers should be allowed to retain profits and reinvest their earnings in developing the infrastructure required to expand the sector.
“That is the only thing that will enable us to sustainably make this sector grow,” he said.
Malik said sustainable investment in high-risk upstream exploration, both onshore and offshore, was essential for strengthening Pakistan’s energy security and reducing its vulnerability to external shocks.
He described the country’s exposure to external shocks as its foremost energy-related crisis and called for petroleum to be made an integral component of the medium-term national energy policy.
He also stressed greater coordination among the petroleum, power and water divisions, saying energy policies could not be developed in isolation from wider economic activity and demand trends.
Energy coordination revived
Malik said the Cabinet Committee on Energy (CCoE), chaired by the prime minister, had been reactivated and had already held several meetings.
He said he had personally proposed that the committee meet every two months, irrespective of whether it had a specific agenda, to regularly assess developments across the energy value chain.
“This is one committee which needs to convene every two months to have a discussion on understanding what is happening in the energy value chain,” he said.
The minister said the CCoE brought together the petroleum, power and finance ministers, providing a platform for collectively determining how the energy sector could be placed on a sustainable footing.
He said every sector and government division now needed to become financially sustainable, warning that the Petroleum Division could not continue to shoulder excessive taxation and financial interventions merely to meet budgetary requirements.
“The Petroleum Division cannot be a division on which you continue to load exorbitant taxation and exorbitant financial interventions to meet budgetary impacts because the sector’s sustainability is equally important,” he said.
Circular debt contained
Touching upon circular debt and other legacy challenges, Malik said the government had managed to keep the flow of circular debt near zero without raising consumer prices.
“Without increasing a single rupee of consumer tariff, we have still been able to maintain the flow of circular debt to near zero,” he said.
He said maintaining financial stability across the energy chain was necessary to create room for future investment and reforms.
On the midstream sector, the minister thanked refineries for providing some relief by reducing diesel prices amid highly volatile international market conditions.
He said the refineries had responded positively to the government’s request, but stressed that the immediate price relief could not substitute for structural reform of the refining sector.
Malik questioned why local refineries remained in a dilapidated condition and why they had not been upgraded to deep-conversion facilities.
“What we need to really get the conversation going is why they are in such a dilapidated state and why have they not been able to upgrade to deep conversion refineries,” he said.
Refinery overhaul targeted
The minister said the new refinery policy and greater operational flexibility were intended to address longstanding weaknesses in the sector.
“Why did we not do it in the last 70 years is a debate that we can have some other day, but that policy is in the field,” he said.
He said the Petroleum Division secretary was finalising agreements with refineries and a signing ceremony would be held after the process was completed.
Malik said the government wanted to ensure that future generations would not inherit the same difficulties in meeting Pakistan’s energy requirements.
Gas sector faces overhaul
The minister also expressed gratitude to the World Bank for supporting efforts to unbundle and reform Pakistan’s gas sector.
He said the government was examining options to separate gas infrastructure businesses from energy businesses, introduce greater competition, improve liquidity in the upstream sector and increase efficiency and optimisation.
A World Bank-supported report was expected by the end of August and would subsequently be presented to Prime Minister Shehbaz Sharif, he said.
“Once that is there, it will be presented to the Prime Minister, and we will slowly and gradually move in that direction,” Malik said.
He said greater competition had already been introduced through the third-party access regime and the government would continue developing the framework.
Deregulation and greater private-sector participation, he added, remained key objectives of the government’s energy-sector reform agenda.
Malik said the government would continue pursuing reforms regardless of criticism or whether individual measures proved popular in the short term.
He said the ultimate test of the government’s decisions would be how future generations judged the choices made by the current leadership.
“I think the true measure will be how the coming generations view what we did when we had the responsibility of doing something,” he said.
