PEL strikes big: Acquires KUFPEC's multi-million-dollar oil, gas assets

ISLAMABAD, Pakistan - Kuwait Foreign Petroleum Exploration Company (KUFPEC) has begun its exit from Pakistan's oil and gas sector by selling significant assets worth almost $60 million to Pakistan Exploration (Private) Limited (PEL), a senior official from the Ministry of Energy informed press on Monday.

"Foreign Exploration and Production (E&P) companies are increasingly discouraged, owing to the large circular debt in the gas sector, which has reached Rs2,700 billion. Rs1,500 billion, including $600 million owed to domestic and foreign E&P businesses, is still outstanding due to gas company defaults. The 12-month delay in approving modifications to the 2012 E&P regulation also influenced KUFPEC's decision," the official source added.

According to an official source, KUFPEC has planned to recover its investments by selling assets and concessions in various blocks across Pakistan and reinvesting the proceeds in other nations.

KUFPEC, a Kuwait Petroleum Corporation (KPC) subsidiary, was founded in April 1981. Outside of Kuwait, the company's primary focus is discovering, producing, and extracting crude oil and gas. It operates in ten countries on five continents: Australia, Asia, Africa, North America, and Europe.

Interestingly, in a press release dated November 23, 2023, KUFPEC confirmed the signing of Memorandums of Understanding (MoUs) with Pakistani firms such as Oil and Gas Development Company Limited (OGDCL), Mari Petroleum Company Limited (MPCL), and Prime Pakistan.

The MoUs targeted strengthening KUFPEC's strategic alliances, exploration portfolio, and asset value in Pakistan.

Mohammad Al-Haimer, CEO of KUFPEC, then said, "The MoUs aren't just restricted to strengthening strategic partnerships to expand our exploration portfolios in Pakistan but also provide significant opportunities to enhance KUFPEC's assets, independent peer reviews, knowledge exchange, and utilizing the expertise of our global partners."

However, KUFPEC's intention to sell its assets and concessions a year later has created severe worries among Pakistan's officials. PEL acknowledged the transaction when contacted, adding, "Yes, we have acquired KUFPEC Pakistan's assets after winning the bid."

However, the corporation did not disclose the asset value, citing non-disclosure agreement.

PEL also admitted that it made advance payments to KUFPEC. According to a news announcement on PEL's website, the acquisition comprises assets from Pakistan's Dadu, Kirthar, Tajjal, and Qadirpur concessions, as well as the Bhit and Qadirpur leases.