Author: Raziuddin (Razi)

Next 12 months are very crucial for the economy, jobs, exports, FEX reserves, stability and security of Pakistan. One of the main factors is availability of Natural Gas to the industrial sector. The indigenous Sui Gas scenario is in front of us – declining sharply. A serious matter indeed. Spot LNG has become expensive, so much that Pakistan has not bought a spot cargo in last few months. The Term Contracts of LNG are also being breached by the suppliers. Lesson is not to sign long-term contract with traders who do not own molecules. Tenders opened on 7-July-2022 by PLL…

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Pakistan is going through serious economic crisis yet the solutions are within reach in a few month time. Of course, needless to say, mismanagement of the energy sector is one prime reason. Energy is lifeline of any economy. Energy not only makes an economy but breaks it too. Import bill of US$ 17 Billion (Jul-Mar 2022) has been in the limelight of crisis. Following steps are suggested for getting rid of economic crisis with in 1 year: 1. Get 7500 MW of Low Cost Solar via Net-Metering without of 1 MW Limit: GENCOs having installed capacity of 5782 MW have…

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The steady depletion of global energy resources due to increased consumption by mankind has contributed to the severe problem of exhausting all available non renewable energy resources such as natural gas, oil and coal. It is easy to do a simple calculation and forecast that global non-renewable energy resources will be exhausted within the next 50 years. Undoubtedly, explorationists have used all the conventional methods of hydrocarbon exploration in past few decades.Shale play is one of the ways that allows hydrocarbon exploration from tight rocks where oil/gas recovery is impossible while using conventional methods. Energy giants like USA, Middle East,…

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Pakistan faces a dual challenge of maturation of current oil and gas reserves and deceleration of exploration activities. This can be further linked to the growing energy needs by the industrial, residential, and commercial users due to economic growth. Pakistan is gifted with a large sedimentary basin having excellent prospects, favourable for oil and gas exploration and production. Despite this fact, the country’s energy demands are being met with an increase in imports of oil and gas. According to Pakistan’s Energy Outlook 2020, if major discoveries aren’t made, keeping in mind the depletion rate of the reserves, the production is…

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[box type=”shadow” align=”” class=”” width=””]Pakistan has underground reserves of billions of barrels oil and billions cubic meters of natural gas, but still imports of petroleum products are very high.[/box] Pakistan has a large enviable sedimentary basin (area) of 827,268 square kilometers; 10 times more than UAE and 72 times more than Qatar. But with only 1123 exploratory and 1496 Appraisal/Development wells i.e., exploration drilling density of 1.35 wells per 1000 square kilometers. Nevertheless, exploration efforts have resulted in 411 discoveries giving a success ratio of 1:2.8, indeed quite attractive. About 95% of these wells are concentrated in Indus Basin whereas,…

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There are new buzzwords in the marketplace, such as Solar power, Inverter systems, Lithium batteries. We here in Pakistan have a habit of giving opinion on technical, commercial, financial, legal, micro-financing etc. in abundance without knowledge or experience. We opine on each and every matter, like we do in case of religion, politics, energy mix, how to run factories, hospitals, hotels and son on. I worked in 4 other countries, besides Pakistan and travelled to almost 60 different countries. While working in in other countries, I find that the people concentrate on their own expertise and keep quiet when matters of…

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Sui Southern Gas Company Limited (SSGCL) has filed its annual Petition with OGRA to increase the FY 2020-21 Average Prescribed (Sale) Rate (Rs/mmbtu), subsequently rates in all the categories except domestic, colonies and Tandoor. OGRA held public hearing on 25-Jun-2020. The interveners (exporters, CNG, Chambers, Associations) requested OGRA and SSGCL to take Covid-19 situation in account, like other countries governments and public serving utilities are giving much needed relief. Gas tariff is a great tool to make Pakistan a strong industrial power. It may not retard Exports in the coming years. The gas tariffs are NOT just Numbers. The Situation…

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Not a dooms day scenario: Every country, every person has been touched by novel coronavirus. Covid-19 has become a household name. The world has never before seen such a standstill, making the earth vibrate less. The fast track spreading of a viral infection in a very short period of time has taken toll East to West/North to South. Every country was hit by economic crisis due to a creature that is 30 million times smaller than me. Yet it has played havoc. No A-bomb no laser-bomb no precision cruise torpedo can kill this silent serial killer. But like other times…

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All countries have a few or more than a few sick industries, some into hundreds and thousands. Pakistan is in the league of hundreds. Some become sick due to market dynamics and some are plain mismanagement. In such sick scenario, the employees lose job, governments lose tax money, investors lose their reputation and dreams but the banks are the major losers. For every investment that has become a non-performer banks have 50 to 80% loss because debt/equity ratio is as such. A number of sick units do recover, but with a plan. Disney went sick and defaulted 11 times only to become…

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There have been articles, statements and interviews that oil and gas is history and Renewable energy such as Solar, Wind are IN. Unsubstantiated and off the cuff articles and statements are detrimental to the economy and society. Once upon a time (2000) there was power MW surplus and unwarranted hue and cry against new power plants lead to load shedding from 2006 to 2018. Similarly, nowadays over capacity MW statements has made the government shy off from new capacity additions. A few Google hits are no alternate to experience and detail studies. Similar is the case with the refinery business…

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Every year the new year resolutions are being made, only to be broken especially weight loss, diet control. As a nation we need to make long lasting and out of box resolutions for the coming year but vow not to lose sight of the achievements we need to make for this beautiful country. No point crying over the state of the economy. Spilled milk is gone. Let’s have new resolutions to make the country it was meant to be; a welfare state. The year is 2020; an opportunity to have 20-20 vision. Let 2020 be a year of resolve and…

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Never before in 72 years of history, did Pakistan had this golden opportunity to have instantly available reliable (IVR) power capacity and units in MW and MWhr to attract investments. It was always in a situation of load shedding with not enough power to supply to existing and new connections. The investors and sponsors of industrialization had to wait for years to get power connection making projects unviable. The investors would miss the market opportunity and would either give up or leave the country for those countries, which had immediate power connections available. Pakistan needs to sustain this IVR power,…

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Oil & Gas is life line of any economy. Oil & Gas producing countries have become advanced states with higher per capita. Although Pakistan is rich in Oil & Gas resources yet the import lobbies and commission agents have kept it poor; forcing it to carry the begging bowl. Import of Oil & Gas is the largest reason of dollar drain and free fall of Pak Rupees. Pakistan imports $16 to 20 billion annually but if this drain of dollars is replaced with indigenous Oil & Gas then Pakistan does not have to beg IMF, China, UAE or KSA and…

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Needless to say, Pakistan is in dire need of Alternate and Renewable Energy (ARE) resources to sustain its economy. Alike, it is in dire need of sustainable institutions to achieve energy for all, energy security and Alternate and Renewable Energy resources into the power system. Importance of alternate and renewable energy sources is immense, therefore the government may consider to have AEDB (Alternate Energy Development Board) converted into a larger independent corporate entity, such as Pakistan Industrial Development Corporation (PIDC) (was once), National Investment Trust (NIT). These institutions were catalyst for industrialization. Similarly, the new ARE corporate entity should become…

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In 2017-18, Pakistan Commercial primary energy mix was as follows: Conventional Primary Energy (Fossil & Nuclear Thermal and Hydro)-2018 Oil: 31.2% Gas: 34.6% LNG import: 08.7% LPG: 01.2% Coal: 12.7%, nuclear electricity: 02.7% imported electricity: 00.1% hydro-electricity: 07.7% Sub-Total: 98.9% Non-Conventional Primary Energy (Solar, Wind)-2018 Renewable Electricity: 01.1% Indicative Generation Capacity Expansion Plan by NTDCL-2040 (official Plan to be owned by the Government) Renewable Electricity: 16.0% World Energy Outlook-2040 Renewable Electricity: 40.0% It means that Pakistan will be 2.5 times behind the world; competing in the international market will be difficult and a very uphill task. The Government needs to…

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The SBP Policy Rate set by Monetary Policy Committee MPC-SBP at staggering 12.25% needs re-definition and aligning it with our competing economies. The Policy Rate is the root for all forms of Interest Rates and Lending, such as KIBOR (12.68%), Repo, PIB, T-Bills, house building loan, agri loans down to credit card charges. This is similar to US Federal Open Market Committee (FOMC) setting Federal Funds Rate (FFR=2.5%) thereof comes the Prime Rate (5%), mortgages, car leasing/financing, students loan down to credit card charges. Our competing countries have Repo Ceiling/Floor at 6% & 4.75% and Policy Repo at 6.25% compared…

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[dropcap]P[/dropcap]akistan’s economy has routinely oscillated between periods of relative stability and busts brought about by external payments crises. Failure of successive governments to push through structural reforms when the economy is stable typically drives this volatility. In the last few years, Pakistan has failed to push through these reforms, raising the likelihood of economic turbulence in the midst of global economic headwinds. Pakistan has binged on cheap dollar debt to raise over $35 billion in external debt since 2013. Oil prices, which fell to under $50 a barrel from over $100, brought about annual savings of over $7bn during this…

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