Parallel to this crisis, are the industrial units, urea fertiliser and power plants, across the country that either are shut down, or, operating at much less than the designed optimal production capacities for want of natural gas as feed stock or fuel to generate electricity. The gas crisis in the country is compounding by the day as the gas reserves continue to rapidly deplete and nothing significant is happening either in the upstream segment of exploration and production (E&P), segment of the petroleum industry of the country!
There are other two disturbing news items reported in the media, one concerning the delay and postponement of auction of petroleum blocks, by 90 days due to lack of interest by international exploration and production (E&P) companies in the country's upstream petroleum sector. Sadly, speaking as a petroleum professional, I believe, the 90-day extension in the auction of the acreage, will neither induce, nor entice international E&P players to bid for the blocks being put on bid by the Ministry of Petroleum. Incompetence and lack of credibility of the incumbent government are the main impediments in this regard, where even a sovereign guarantee is not worth the paper it is written on!
The other disturbing news in this regard pertains to the downstream segment of the national petroleum industry, woes of which have been narrated by the Managing Director of Pakistan State Oil (PSO), during a press conference, the other day, when he complained about the "powerful cartel and mafia", at works in the products segment of the industry, blocking initiation of new projects in the petroleum industry. One is simply aghast as to how can a government, its subsidiary ministry and a public-sector company like the PSO, cannot rein in the delinquent members of anti-state cartels and mafias, working against the country's vital national interests and pursuits? No government in the world, worth its name would tolerate such nonsense and arm-twisting by a bunch of crooked operators. One would have liked the MD PSO to publicly identify the individual projects on hold, name and discredit the delinquent cartels and mafias, stalling these projects.
We Pakistanis, who use CNG as a fuel for transport, should be prepared to say a big "goodbye" to CNG for, there is no indigenously produced natural gas available in the country to be supplied and wasted as auto fuel, which is desperately needed for the industry at large and particularly to the vital urea fertiliser and power plants. The sooner the use of gas as CNG for vehicles, is stopped, the better for the energy-starved country. It is simply ludicrous to use natural gas as auto fuel.
It is only a matter of time when the country will completely run out of natural gas, unless the E&P sector is intensively stimulated with tangible incentives and vigorously promoted by the petroleum ministry. The much hyped, but inconsequential 2012 petroleum policy will neither spur nor entice international E&P players to show any interest or take part in the country's upstream petroleum segment of the industry, for, the individuals at the helm of affairs in the petroleum ministry and its affiliated public-sector organisations neither have the 'hands-on' experience of the industry, nor the competence, leadership attributes, skills or expertise to put the country's petroleum industry on the right track.
Pakistan's petroleum policy, encompassing the entire gamut of related elements and imperatives of petroleum industry, needs a paradigm shift, both at the planning and implementation levels. Pakistan's prospective acreage is pretty much explored for primary recoveries. Relatively high prospective areas are in the unstable and insurgency-afflicted areas of Balochistan, where the Kohlu block in the Marri-Bugti area is a prime example of unresolved issue of opportunity. The hullabaloo over the 'Shale and Tight gas' potentials, sound like a fairytale, unless backed by a credible and prospective evidence.
Lastly, one would agree with the MD of PSO that as the CEO, he should have the authority to take decisions independently in the matters such as the HSFO supply contract and the Contract of Affreightment (COA), as he has signed, which should most certainly fall under his 'limit of authority' prerogative as the CEO. Audit and due diligence of the contracts, will be in order to allay any doubts over issues of impropriety. If these contracts result in considerable benefit to PSO, it would be to MD's glory and if these result in disaster, it would be his neck! That is a cardinal appraisal rule of corporate governance.
One should also agree with MD PSO that his organisation has the potential to become a 'Fortune-500' organisation. If PSO and OGDCL are merged into a single entity in the upstream segment that goes into the downstream sector of refining, coupled with the existing marketing/distribution set-up, and adds a bulk liquid carrying vessel's fleet to its operations, PSO, no doubt, has the potential and requisite attributes to become Pakistan's first "fully integrated" world-class petroleum organisation.
(Views expressed in this article are not necessarily those of the newspaper).