Negative growth in gas production

According to a Business Recorder exclusive, during the ongoing tenure of the PML-N administration, Pakistan registered a negative 2 percent growth in gas production - an extremely disturbing figure given the fact that the party is repeatedly making claims that it has successfully met the energy crisis through taking well-informed holistic decisions. Such decisions require looking at all the energy sub-sectors, identifying weaknesses in each and then proceeding with a well thought out strategy designed to deal with those very weaknesses without losing sight of one important proviso: availability of energy at a competitive price for domestic manufacturers to enable them to compete internationally and an affordable price for domestic consumers.
It is indeed unfortunate that this basic proviso has been sidelined, at best, and roundly ignored at worst by the PML-N administration. The focus during the past five years has been on making deals to import Liquefied Natural Gas (LNG) instead of on proactively granting licences for domestic gas exploration activities in spite of the fact that the price of imported LNG, linked to the international price of crude, is, at present, more than double the price of domestic gas.
Since 2013, foreign exploration companies that have left Pakistan include Niko, Baker Hughes, Tullow Oil and Premier Oil and the reason for their departure is twofold: (i) failure of the federal government to offer fresh exploration blocks for bidding, prompting provinces to demand that the federal government grants them the right to offer blocks for exploration - a legitimate demand if this failure is sourced to political considerations, as claimed by provinces where the PML-N is not in power; and if the rationale for preference for LNG imports over offer of fresh exploration blocks for bidding was for individual as opposed to the nation's economic interests then there is a need to re-evaluate the various agreements signed for LNG imports; and (ii) offer of low wellhead cost. Unfortunately, the incumbent Prime Minister Shahid Khaqan Abbasi must bear the major brunt of this failure as he not only held the portfolio of Minister for Petroleum and Natural Resources from June 2013 till 1 August 2017, but has also retained the merged portfolio of Energy Ministry since then.
There is no doubt that during the current tenure of the PML-N administration, law and order has improved considerably due to the success of army-led operations since 2013 - Zarb-e-Azb and Ruddul Fasaad - to deal with foreign-led and local insurgency, a factor that was cited as the major impediment to exploration activities in far-flung areas in the past. However, improved law and order has certainly not contributed to enhanced activity as the Board of Investment revealed that foreign direct investment in oil and gas sector declined from 502 million dollars in 2013-14 to only 138.6 million dollars in July-February 2018.
To conclude, the PML-N government's repeated claims that it has enhanced generation, reportedly by a whopping 10400MW, has sadly been achieved through massive borrowing whose associated interest costs have been added as tariff making our electricity price uncompetitive within the regional context and, additionally, the fuel used for this enhanced generation is largely imported. The time left for the end of the tenure of the present government is less than a month and a half, too little to begin the bidding process for exploration, and therefore one can only hope that the next government does not continue to ignore this sub-sector.