OICCI calls for Integrated Planning for Energy Value Chain

Karachi, February 26, 2020: The Overseas Investors Chamber of Commerce and Industry (OICCI) has launched its ‘OICCI Energy Report 2019’ today. The report is based on the recommendations of the 31 leading international energy sector companies operating in Pakistan, who are members of the chamber.

Pakistan’s energy sector has witnessed significant transformation over the past five years, with the power generation capacity increasing rapidly to over 39000 MW by mid-2019, with the inclusion of two large RLNG based power plants, Thar coal project and imported coal-based power plants leading to a major shift in the energy mix. Despite the relative fast paced increase in the generation and transmission capacity, over 60 million Pakistanis do not have access to electricity from the grid, which not only impacts the economic growth of the country, but the economic exclusion has a social impact also.

On top of this, the mounting circular debt, in excess of Rs 1.9 Trillion, and the inability of distribution companies to arrest the ever increasing technical and non-technical losses, continue to burden the national exchequer by an additional Rs 40-50 Billion annually.

Presenting the report, CE/Secretary General, OICCI, M. Abdul Aleem commented that “OICCI Energy Report 2019 includes a number of recommendations to streamline the Oil and Gas and Power sectors. For the Upstream oil and gas exploration sector, the report recommends that besides the estimated 30 onshore blocks that may be available for bidding, offshore blocks should also be considered and about 5-10 blocks should be offered every 3-6 months, so that there is a steady flow of new acreage to accelerate indigenous E&P activities. For the Downstream Oil Refining and Marketing sector, OICCI recommends that motor gasoline and diesel front and back-end price should be deregulated. Moreover, an Integrated Energy Planning (IEP) approach must be adopted and components of the Power Value Chain should be liberalized to bring operational efficiency and reduce energy costs”.

“The Ministry of Energy is playing a pivotal role in introducing structural reforms to address Pakistan’s prevalent energy issues. However, it is imperative that relevant stakeholders, such as the OICCI, are involved for these to be successful” commented M. Abdul Aleem adding that “OICCI is aware of the government’s plan to offer 18 onshore exploration blocks for bidding, approval for 5 LNG companies to set up regasification terminals at Port Qasim (PQA) and initiative to develop an Integrated Energy Plan.”

OICCI Energy Report 2019 is the collective effort of the 31 OICCI members belonging to the energy sector, who are associates of leading international players working in the areas of oil exploration, refining, marketing and distribution, coal mining and power generation segments. They cumulatively contribute over Rs 600 Billion annually to the national exchequer and employ a large number of skilled and professional staff.

The nearly 200 OICCI members contribute about a third of the country’s total tax collections, invested nearly US$ 3.0 billion last year in new investments and employ about one million people with a significantly larger contribution to the socio economic development of the community.

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