Pakistan Oil and Gas Industry Update Quarter 2 2012

$ 1 088 - February 2013 - by Business Monitor International - 93

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BMI View: Successive energy shortages in Pakistan have led the government to acknowledge that longterm
gas self-sufficiency has become impossible. Domestic consumption continues to rise rapidly, boosted
by the start-up of additional gas-fired power stations and continued use of Condensate Natural Gas cars. As
import volumes rise, LNG is set to become part of the energy mix. In the meantime, Pakistan will again
attempt to privatise more of its various state-controlled energy companies and stimulate investment in
domestic oil and gas production. While we do not believe it would render Pakistan gas self-sufficient over
the next 10 years, the recent start-up of shale gas exploration creates a large upside risk to our forecast.
The main trends and developments we highlight for Pakistan's Oil & Gas sector are:
- Energy minister Asim Hussein has acknowledged that the current situation in Pakistan requires policy
rationalisation. Several steps have been taken including a rise in regulated gas prices, a revamp of
licensing regulation to promote exploration and distribution of production in local markets, the offer of
60 onshore blocks in a licensing round, offshore and unconventional exploration, and development of
necessary import infrastructures.
- We expect gas reserves to fall until 2022 as consumption increases from 39bn cubic metres (bcm) in 2012
to 55bcm by the end of the forecast period. Production will not follow that trend. We see gas output
peaking at 40.1bcm in 2015 and falling afterward to slightly above 35bcm by 2021 as the Sui Gas Field,
the main producing field in Pakistan, reaches the end of its life.

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