ISLAMABAD: The Special Investment Facilitation Council will take up delay in submission of the implementation framework to Executive Committee of National Economic Council (ECNEC) for its approval to allow the exploration & production (E&P) companies to sell 35 percent gas to the private sector despite go-ahead by the Council of Common Interest (CCI) on January 28 this year.
The CCI that met with the then caretaker prime minister Anawaarul Haq Kakar in the chair, had allowed the E&P companies to directly sell 35 percent of gas from their future gas fields to the private sector subject to the condition that the Petroleum Division will submit the framework to the ECNEC for its approval.
The CCI took the initiative to help reduce the liquidity crisis of exploration and production companies as their circular debt has increased to Rs1.273 trillion because of non-payments by Sui Gas companies for decades. Due to non-payments, many international companies have left the country.
The then caretaker energy minister Muhammad Ali had done a lot of work to this effect basically to wriggle out the country’s public sector and foreign E&P companies from the liquidity crisis that has aggravated manifold because of the default of Sui gas companies in payment of Rs1,500 billion out of which $600 million are needed to be paid to foreign E&P firms. The E&P companies have not liquidity enough only to continue its core business of exploration and production activities in the country, but also pay the royalties to the provinces.
No progress on this issue of paramount importance has agitated the E&P companies, a senior official of the Energy Ministry told The News, adding the SIFC has taken notice of the delay.
In its letter to Petroleum Minister Dr Musadik Malik on April 17, Pakistan Petroleum Exploration and Production Companies Association (PPEPCA) indicated that the companies have no option but to reduce or suspend production operations leading to a massive shortage of gas if the corrective action for speedy payments by SNGPL and SSGC is not taken.
