- $5 billion pledge sparks hopes of E&P revival – but can policy keep pace?
Interview with Mr Adnan Saeed, an analyst
PAGE: Tell me something about yourself:
Adnan Saeed: I am a Certified Global Teacher by the Varkey Foundation and a lifelong advocate for impactful, inclusive, and practical accounting education. With over 25 years of experience across Pakistan’s most respected institutions, my academic journey has been shaped by a deep commitment to shaping future finance professionals through concept-based learning, strategic thinking, and real-world application.
I currently serve as the Manager of Academics at the Institute of Chartered Accountants of Pakistan (ICAP), where I lead curriculum design, assessment frameworks, and academic strategy for professional accountancy education nationwide. Prior to this role, I taught as a senior faculty member at the Institute of Cost and Management Accountants of Pakistan (ICMAP), where I was recognized multiple times with the Nationwide Faculty Roll of Honor, a testament to my consistent contributions to teaching excellence and student outcomes.
I also had the honor of leading the Saeed Academy of Commerce & Economics (SACE) — founded by my late father, Mr. Anwer Saeed Khan — for over two decades. SACE was Pakistan’s first NGO-style commerce education initiative, offering symbolic tuition and full scholarships to underprivileged students, often funding their exam and book expenses personally. Throughout my teaching career, I have held faculty positions at prestigious universities including SZABIST, IoBM, and Federal Urdu University, delivering foundational and advanced courses in Financial Accounting, Cost Accounting, and Public Sector Accounting.
I have conducted over 50 professional workshops, and regularly engage in faculty development, curriculum modernization, and student mentorship. Beyond the classroom, I have contributed to academia through international collaborations.
I worked alongside Mr. Mark S. Bettner, former Head of Management Science at Bucknell University, on the renowned textbook Accounting: The Basis of Business Decisions, originally authored by Walter B. Meigs (late). I also reviewed Kaplan’s financial accounting content for ICMAP and authored a dedicated chapter on Consignment Accounting for Advanced Accounting for Graduate Students by Uzair Hassan (late).
As a writer and education content creator, I actively share insights on platforms such as Medium and Instagram (@mindful educator), aiming to demystify accounting, foster student engagement, and highlight the evolving role of financial literacy in modern education.
I believe education is not about rote learning, but about empowering students with the confidence and clarity to navigate both in exams and real-life financial decisions. My mission is to continue making meaningful contributions at the global level — building capacity, bridging equity gaps, and nurturing ethical, informed learners for a better tomorrow.
PAGE: How would you comment on the performance of the oil and gas exploration companies?
Adnan Saeed: The performance of oil and gas exploration companies in Pakistan reflects a sector striving to stay operationally resilient in the face of mounting economic, regulatory, and structural challenges. Key national players — OGDCL, PPL, and Mari Petroleum — continue to make valuable contributions to domestic energy security, yet their growth potential remains stifled by persistent issues such as the circular debt crisis, delayed payments from government buyers, foreign exchange constraints, and a lack of new large-scale discoveries. For instance, OGDCL, despite reporting a strong profit of PKR 224 billion in FY 2022–23, is facing growing receivables from power and gas distribution companies, affecting its liquidity and reinvestment capacity. Pakistan Petroleum Limited has been active in both exploration and development, but delays in regulatory approvals and low investor appetite have hindered its ability to ramp up operations. Mari Petroleum, known for its operational efficiency, continues to demonstrate consistent profitability, though its expansion is largely limited to domestic fields, many of which are mature. New exploration efforts have yielded some modest discoveries, particularly in Sindh and Balochistan, but no breakthrough find has occurred in the last decade that could significantly shift Pakistan’s energy balance.
The production from existing fields is steadily declining, and enhanced recovery techniques or unconventional resources like shale gas remain largely untapped due to capital constraints and technological limitations. Additionally, foreign participation in the exploration sector has diminished, driven by investor concerns over policy inconsistency, security risks, and the volatile macroeconomic environment.
In the fiscal year 2022-23, exploration wells drilled remained below target, and basin potential remains significantly underutilized. From a policy standpoint, the sector requires urgent regulatory reforms, faster block award processes, incentivization of foreign investment, and a modernized framework that aligns with global energy transition trends.
In contrast to global peers, where exploration is increasingly aligned with digital innovation, energy diversification, and ESG principles, Pakistan’s sector remains heavily reliant on traditional hydrocarbons and outdated regulatory architecture. This growing gap risks further isolation unless domestic reforms are prioritized.
PAGE: Delayed payments are a significant barrier to upstream companies’ ability to invest in their assets. What is your take on this?
Adnan Saeed: Delayed payments have become a chronic structural hurdle for upstream oil and gas companies in Pakistan, directly undermining their ability to sustain operations, reinvest in exploration, and unlock the country’s full energy potential.
Companies such as OGDCL, PPL, and Mari Petroleum face massive receivables — often running into hundreds of billions of rupees — from public sector entities like Sui Northern Gas Pipelines Limited (SNGPL), Sui Southern Gas Company Limited (SSGCL), and power generation companies. These entities, in turn, are unable to clear dues due to subsidy arrears, inefficient tariff recovery, and circular debt entanglement. The outcome is a cash flow choke that affects even the most profitable exploration and production (E&P) companies.
For instance, OGDCL’s receivables surpassed PKR 800 billion as of 2023, according to its annual report. This liquidity pressure restricts their ability to finance seismic surveys, drilling campaigns, well development, and technological upgrades — all critical for sustaining production in aging fields.
Moreover, this delay in payments erodes investor confidence — both local and foreign. International oil companies (IOCs) have already scaled back or exited Pakistan due to delayed returns and bureaucratic bottlenecks. For domestic firms, even government-backed ones, the inability to access their own earned revenue becomes a barrier to innovation, modernization, and long-term asset integrity.
In addition, working capital constraints force companies to delay exploration plans, shelve marginal projects, and in some cases, reduce production levels to avoid further losses. This is particularly dangerous given Pakistan’s heavy reliance on imported fuels and the depletion rates in existing gas reservoirs. In the global context, efficient payment mechanisms and predictable cash flows are seen as minimum enablers for upstream investment. Countries that have resolved these issues — such as Norway, Brazil, and UAE — are attracting billions in exploration capital, while Pakistan’s sector remains capital-starved despite significant untapped reserves.
Unless the payment cycle is restored through comprehensive energy sector reforms — especially circular debt resolution and revenue chain transparency — the upstream oil and gas sector will continue to shrink in both ambition and capability, posing a serious risk to Pakistan’s energy self-sufficiency.
PAGE: What must be done to develop Pakistan’s shale and tight gas potential, aiming to address the country’s energy needs through indigenous resources?
Adnan Saeed: Unlocking Pakistan’s shale and tight gas potential presents a strategic opportunity to reduce dependence on imported fuels, stabilize energy prices, and enhance national energy security. However, progress has been slow due to a combination of technical, financial, regulatory, and infrastructural barriers. Pakistan holds significant shale gas and tight gas reserves.
According to a 2015 US Energy Information Administration (EIA) report, Pakistan may have over 105 trillion cubic feet (TCF) of technically recoverable shale gas and over 9 billion barrels of shale oil. Additionally, local studies commissioned by the Petroleum Division confirm the presence of considerable tight gas formations, particularly in Sindh and southern Punjab. Yet, despite this promise, actual commercial production from these resources is negligible. To tap into this potential, the following multi-pronged strategy is required:
1- Revise and Incentivize the Tight and Shale Gas Pricing Policies
Pakistan’s Tight Gas (Exploration and Production) Policy 2011, although a step forward, remains outdated. It offers a 40–50% premium over conventional gas pricing, but this is still insufficient to attract high-risk investment, especially when global prices are volatile and the rupee is weakening.
Recommendation: Introduce a revised, market-linked pricing framework that compensates for the high capital and operating costs associated with horizontal drilling, multi-stage fracking, and extended testing phases. Incentives must also factor in environmental safeguards and water management.
2- Strengthen Technical Expertise and Technology Transfer
Shale and tight gas extraction require advanced techniques—such as horizontal drilling, seismic imaging, and hydraulic fracturing—not yet mainstream in Pakistan’s E&P landscape. Current exploration firms have limited capability in these areas.
Recommendation: Pakistan must partner with international E&P companies that specialize in unconventional resource development (e.g., Halliburton, Schlumberger, ExxonMobil) through joint ventures, knowledge-sharing initiatives, and training programs for local engineers.
3- Develop Infrastructure and Water Management Systems
Hydraulic fracturing demands significant water availability and infrastructure for waste disposal and environmental monitoring. Pakistan lacks a coherent framework for water sourcing and post-fracking treatment, especially in arid regions.
Recommendation: Develop a national shale gas roadmap that integrates resource mapping, water resource management, and environmental compliance mechanisms. Specialized zones can be established with shared infrastructure and regulatory oversight.
4- Streamline Regulatory and Environmental Approval Processes
Currently, the approval cycle for unconventional gas blocks is slow, bureaucratic, and unpredictable—discouraging private and foreign investment.
Recommendation: Establish a One-Window Regulatory Framework with time-bound clearance procedures, fiscal stability clauses, and accountability benchmarks under the Petroleum Division.
5- Facilitate Risk-Sharing and Access to Financing
The high upfront cost and delayed returns from shale development deter both public and private players. The absence of viable risk-sharing mechanisms, such as government-backed guarantees or public-private investment funds, has further stalled momentum.
Recommendation: Create exploration risk funds or offer partial guarantees through sovereign support or multilateral development agencies (e.g., World Bank, ADB), especially for initial pilots and feasibility studies.
Global Context:
Countries like the United States have leveraged shale gas to transform their energy landscape, while others such as Argentina (Vaca Muerta Basin) and China have launched targeted state-supported programs to build long-term shale capacity. Pakistan needs to follow a tailored but ambitious model, grounded in local realities but informed by global best practices.
The road to developing Pakistan’s shale and tight gas resources is long but necessary. It will demand policy reform, investment-friendly frameworks, environmental diligence, and technological partnerships. If executed with strategic clarity, this can be a game-changer for Pakistan’s energy independence.
PAGE: Last year, local and international firms announced an investment of $5 billion in Pakistan’s oil & gas exploration and production (E&P) sector. What is your perspective in this regard?
Adnan Saeed: The pledge of a $5 billion investment over the next three years from both domestic and international E&P firms is a promising signal of renewed confidence in Pakistan’s exploration narrative—but translating this promise into actual, sustainable production will require structural reforms and diligent execution.
1- Significance & scale
Announced in July 2024 during a high-level meeting with Prime Minister Shehbaz Sharif, the investment commitment includes drilling approximately 240 exploratory wells aimed at tapping both onshore and offshore resources. This reflects strong optimism backed by renewed policy incentives, including a revised Petroleum Policy and the introduction of a dedicated Tight Gas Policy.
2- Key enablers and triggers
Several factors have contributed to this influx of investor interest:
- Policy advancements: Amendments to allow up to 35% third-party gas sales and higher pricing for tight gas have improved both cash flow and project viability.
- Regulatory smoothing: A committee chaired by Deputy PM Ishaq Dar was formed to expedite approvals and resolve sector bottlenecks.
- Improved macro environment: The inclusion of RLNG diversion in tariffs and revision of gas pricing has alleviated pressure on state utilities and stabilized the sector.
3- Risks and hurdles
Despite the strong headline figure, several challenges could undermine execution:
- Policy volatility: Subsequent attempts to alter block-award frameworks have raised concerns that the original CCI-approved incentives may be diluted.
- Structural challenges: Delayed payments, circular debt, and lack of foreign exchange cover remain systemic constraints.
- Execution risk: The real test lies in converting MoUs or announcements into funded drilling campaigns, producing meaningful volumes that impact import substitution or power reliability.
4- Outlook and required follow-through
To ensure this investment translates into tangible supply growth, the government must:
- Guarantee policy continuity and fiscal stability.
- Streamline approvals via the Dar-led committee and leverage the SIFC framework for faster implementation.
- Ensure payment discipline and expedited remittances to build trust.
- Monitor KPIs: drilling progress, success ratios, and incremental production must be tracked and reported transparently.
5- Comparative context
Globally, investment of this scale is modest — but in Pakistan’s context, it represents a considerable shift. Countries like Brazil and Guyana attract larger flows, but Pakistan’s recent policy reforms and renewed interest, especially from offshore and tight-gas prospects, show real potential. However, unlike mature global basins, Pakistan still needs to demonstrate commercial success through first-mover projects.
The $5 billion commitment is a welcome development and an indicator of growing investor sentiment. But such high-level pledges are only as valuable as their execution. With focused regulatory follow-through, financial discipline, and measurable operational delivery, this investment can ignite Pakistan’s E&P renaissance. Otherwise, it risks becoming another round of aspirational rhetoric.