Site icon Pakistan & Gulf Economist

Balochistan and KPK: The reservoir of Pakistan’s energy

Balochistan and KPK: The reservoir of Pakistan’s energy

Energy is recognized as a key player in socio-economic progress of any country. Pakistan, like other developing nations in the region are struggling due to energy shortfall as energy sector remains embroiled due to the mismatch between the supply and demand as policymakers have continued to focus on traditional sources of power generation; namely, oil and natural gas.

Pakistan is a nature blessed nation where every province has its own kind of wealth where Balochistan and Khyber Pakhtunkhwa (KPK) is gifted by immense wealth through its energy sources. Now a days, Pakistan is suffering from a natural gas shortage crisis because of sustainability issues in the energy sector for the last three decades and in particular to hunt for gas in Balochistan (further exploration). Pakistan’s fragile economy and insecurity conditions since the last decade and a lack of political leadership commitment have led the economy to constantly slow down, widening the energy catastrophe in the country in particular to the gas shortage crisis in Balochistan but crisis management always requires latest data evidence based on policy recommendations. If we talk about Balochistan than Pakistan’s recoverable reserves of natural gas have been estimated at 29.671 trillion cubic feet (January 1st 2009), 19.3 trillion in Balochistan estimated in 1954. During July-March 2009 the production was 3986.5 million cubic feet per day (mcfd) with an increase of 0.52% within 6 months compared to 3965.9 mcfd during the 2008 and according to the Hydrocarbon Development Institute of Pakistan data from 2009, most of the gas is consumed in industries and commercial sectors compare to household and transportation consumption sectors. If the increase remains consistent annually it is significant to increase more production through exploring more gas fields in the country in particular to the Balochistan province.

No. Consumption of Gas (billion cubic feet) 2009
Category CFT
01 Household 172
02 Industries / Commercial 694.4
03 Transportation (CNG) 65,725 MCFT

Among the 15 natural gas fields, Sui is one of the biggest natural gas fields in Pakistan located in Balochistan with annual production of 800 billion cubic feet and daily production is 660 million cubic feet and Sui is a backbone of the natural gas production in the country. In addition, according to the Hydrocarbon Development Institute of Pakistan data from 2009, most of the gas is consumed in industries and commercial sectors compare to household and transportation consumption sectors. If the increase remains consistent annually it is significant to increase more production through exploring more gas fields in the country in particular to the Balochistan province but there is no available data available regarding more sister natural gas fields surrounding the Sui gas field. But maintenance and further exploration of natural gas is one of the question mark for the state as the growing insurgency and military operations in the Balochistan province are direct barriers of limiting the production and exploration capacity of the federal and provincial governments.

Currently, further exploration of natural gas is stagnant in Balochistan because of numerous factors. Such as, lack of proper planning, lack of budget availability, fragile political interest, increasing insecurity and distrust in the region between the provincial and federal governments.

Like Balochistan, KPK is also contributing Pakistan economy from its energy and power resources. As we all know that, significant increase in the demand for electricity have led to significant energy shortages in the country so we use water resources to reduce the scarcity of energy, which provides tremendous opportunities for high return on investment in hydroelectric projects in Khyber Pakhtunkhwa, as it is naturally endowed with great potential for hydroelectric generation. As of June 2018, Pakistan’s recoverable hydropower generation capacity was about 59,796MW, while KPK has 24,736MW (41 percent of the total recoverable potential). In the nation, 3,894MW of 6,556 MW of installed hydel capacity is placed in KPK. Not only will the current energy disasters be avoided if the capacity is optimally utilized, but even Khyber Pakhtunkhwa and the FATA region alone could seek to export power to neighboring countries. A number of organizers and their experts conducted surveys and identified sites across the length and breadth of the province for power stations around the rivers and their tributaries.

Hydropower potential in KPK MW
In operation
Under development
Public sector 9,559
Private sector 2,398
Raw sites 8.930
Total 24,736

A region of approximately 143,619.69 square kilometers is being explored in the country for oil and gas, of which 18,890.66 square kilometers are in Khyber Pakhtunkhwa and FATA, i.e. 13.15% of the total. Eight businesses as of March 2012. Oil and Gas Development Company Ltd, (OGDCL), Mari Petroleum Company Ltd, Tullow MOL, Pakistan Petroleum Ltd, OPII, China Zhengue Oil and Hyear Box were involved in Khyber Pakhtunkhwa exploration and manufacturing activities. By 2012, according to the Ministry of Petroleum and Natural Resources, the province’s contribution to the output of hydrocarbons (38.54 percent crude oil and 8.62 percent gas) in Pakistan’s primary energy supply was substantial. The first discovery in the region was made in 1999. Khyber Pakhtunkhwa’s oil and gas industry has a considerable influence on the economy. The sector draws a large amount of foreign direct investment to the province. The province provides low risk opportunities to companies with a market rate of return for oil exploration. Huge oil & gas reserves, discovered mainly in the Karak and Kohat districts, show promising targets for petroleum exploration. The presence of domestic and foreign companies in the region indicates promising prospects for oil and gas.

Crude oil Reserves at KP & FATA
Field Company Reserves (‘000 US barrels)
Manzalai MOL 24.3
Mamikhel MOL 10.1
Maramzai MOL 8.2
Chanda OGDC 22
Mela OGDC 24.91
Nashpa OGDC 13.25
Makori MOL 7.58
Natural gas Reserves at Khyber Pakhtunkhwa & FATA
Field Company Reserves (Trillion cubic feet)
Manzalai MOL 1.59
Mamikhel MOL 1.13
Maramzai MOL 0.26
Chanda OGDC 0.04
Mela OGDC 0.08
Nashpa OGDC 0.07
Makori MOL 0.17

So, it is important to keep the things in mind that Pakistan’s current economy and annual growth rate of the GDP is low, country’s total tax to GDP ratio is very low which means that governments have been chronically underfunded. However, the war on terrorism had seriously affected Pakistan national security and economy. Large proportions of foreign aids has been reduced. On other hand, large defense budgets are depleted to counter terrorism and despite of less financial support to Pakistan the borrowing remains indispensable for providing curial budgetary support and macroeconomic stability and if we talk about domestic economy management system than we may find huge concerns towards sustainable growth and development as Pakistan is highly centralized in revenue collection.

Nearly 90% of provincial expenditures are met through federal transfers to provinces. This dependency on the federal government limit the productivity of the province and mainly delays happen due to long beaurucratic procedures and transfer of funds from federal government to province and subsequently to further sub-national levels (district levels) so, it Is concluded that, federal government to provide equitable resources to all the provinces to help the propel of the province enjoy development in terms of health, education and having access to dignified means of income but it is mandatory for the provincial governments to ensure cooperation with the federal government and initiate dialogues for exploring more natural fields in the province and not to demand very much high percentage of royalty accompanied by the leadership of armed forces necessary for peace and prosperity in the provinces.

[box type=”note” align=”” class=”” width=””]The author Urooj Aijaz is MD Innovation Summit/Faculty Bahria University Karachi[/box]

Exit mobile version