- Political stability and incentives key to attracting foreign oil investment in Pakistan
Interview with Mr. Kalim A. Siddiqui — former managing director, Pakistan State Oil
PAGE: Tell me something about yourself, please:
Kalim A. Siddiqui:Â I am a former Managing Director of Pakistan State Oil and former President of Byco Petroleum. I am holding a Bachelor in Chemical Engineering from University of Bradford in England (UK) and a Masters in Chemistry from Karachi University, has broad-based, global experience by working in USA, UK, Australia, Vietnam and Pakistan for over 36 years.
I am an enthusiastic and highly accomplished Executive with 36 years of extensive fuels/lubricants business expertise in marketing, sales, operations management and system re-engineering in oil industry by running supply chain, streamlining processes, hunting for new business and growing top producing accounts; I have experience of developed and emerging markets/cultures. I am a collaborative Leader with aptitude to achieve change, excite the organisation, infuse new ideas and deliver dramatic, bottom-line outcomes; recognise to accomplish multiple customer-specific priorities with competence, exemplary follow-up and interpersonal abilities; I am highly expert in high-level market segments, top-down selling and vertical market mastery.
I have served as Chairman Oil Companies Advisory Committee (OCAC) and has held directorships in various reputable companies, & professional and educational institutes including Pakistan Refinery Limited, Pak-Arab Pipeline Company, Asia Petroleum Limited, Pak-Grease Manufacturing Company Limited, Petroleum Institute of Pakistan, Pakistan Advertisers Society and Lahore University of Management Sciences. Before joining PSO in 2001, I have served in Caltex (now Chevron) for over 20 years locally as well as internationally. International assignments were located in the USA, Australia and Vietnam.
In a longer spell of over 20 years in Caltex, I have dealt with fuels, lubes and LPG in all aspects like product development, product engineering, supply chain, operations, production/manufacturing and sales/marketing. My three years of work in the UK was with Howden Engineering Company, Burmah-Castrol refinery, North West Water Authority and A.P.V Company before coming back to Pakistan in 1980.
PAGE: It is being claimed that a substantial deposit of petroleum and natural gas has been discovered in Pakistan’s territorial waters, a cache so large its exploitation could change the country’s destiny. How would you comment?
Kalim A. Siddiqui: Although these Pakistan’s hydrocarbon resources are yet to be quantified, some estimates suggest that this massive potential discovery constitutes the fourth-largest oil and gas reserves in the world. This could be a potential game-changer in the region’s energy flows and it is said it could change the economic trajectory of the beleaguered country. I understand that the three-year survey was undertaken to verify the presence of the oil and gas reserves. “If this is a gas reserve, it can replace LNG imports and if these are oil reserves, we can substitute imported oil. However, we must understand that it would take years before the country could be able to exploit its newfound fossil fuel potential resources, adding that exploration alone required a hefty investment of several billions of dollars and it might take four to five years to extract reserves from an offshore location. But no one is rushing to drill in Pakistan, and experts are concerned about jumping the gun.
Currently, Venezuela is thought to be the leader in oil reserves with around 3.4 billion barrels, while the US has the most untapped shale oil reserves. Saudi Arabia, Iran, Canada and Iraq constitute the rest of the top five. While the country should remain optimistic, there’s never 100% certainty that the potential reserves would be discovered as expected. It will remain a wishful thinking until the drilling process begins and exploration results in the discovery of reserves.
PAGE: What is your standpoint about shale oil reserves in Pakistan?
Kalim A. Siddiqui:Â The US Energy Information Administration (EIA), a US government agency, has released a report which makes Pakistan as the country with the ninth largest shale oil reserves in the world. Other countries listed in the top 10 by the report which bears the weighty title “Technically Recoverable Shale Oil and Shale Gas Resources: An Assessment of 137 Shale Formation in 41 countries outside the United States” include Russia, Venezuela, Mexico and Indonesia.
The report estimates Pakistan’s technically recoverable shale oil reserves at 9 billion barrels. Compare this to our current proved oil reserves of approximately 300 million barrels and the extent of the good news — a 30-fold increase in reserves – becomes clear. But it may be a little too early to celebrate. We need to wake up and make sincere efforts for the prosperity of our country by converting these reports into a reality.
PAGE: What is your take on investment in exploration of oil in Pakistan?
Kalim A. Siddiqui: Security concerns and high costs are deterring international oil companies from pursuing exploration in Pakistan, leaving China as the most likely partner for future development. To attract interest of international players to invest in Pakistan, we require political stability in the country and bringing down the cost of doing business with monetarily attractive policies.
Single window operation to facilitate foreign investors to come and invest in Pakistan. It goes without saying that continuity of government policies is a must as these are long term projects and require substantial investments so no one is interested in working in an uncertain environment where investment security is not assured.
PAGE: What is your perspective about oil import bill in Pakistan?
Kalim A. Siddiqui: Pakistan covers 29% of gas, 85% of oil, 50% of liquefied petroleum gas (LPG), and 20% of coal requirements through imports, according to one of the reports. Pakistan’s total energy import bill in 2023 clocked in at $17.5 billion, a figure projected to rise to $31 billion in seven years. Unless we explore/develop our own domestic energy production for oil & gas, it will be extremely difficult for us to sustain these imports under prevailing economic conditions of the country.