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July 19, 2023
ISLAMABAD: Petroleum exploration and production companies operating in Pakistan threatened on Tuesday to suspend activities over non-payment of their dues worth over Rs1.3 trillion (about $4.65 billion) by the Sui gas companies.
In a letter to Finance Minister Ishaq Dar, Minister of State for Petroleum Dr Musadik Malik and the relevant agencies and companies, the Pakistan Petroleum Exploration & Production Companies’ Association (PPEPCA) said they had been taking up the matter with the government and companies concerned since September last year, but their dues continued to grow and the payments they get were not even sufficient to cover taxes they pay to the government.
“The payment made by Sui companies is not even sufficient to cover payment of 18 per cent sales tax and 12.5pc royalty and advance income tax and as a result nothing is available to fund the operating, development and exploration expenditures,” said the PPEPCA.
Under such circumstances, companies are forced to borrow funds at exorbitant rate of 25-30pc to run the gas production operations and have shelved most of the planned exploration and development drilling activities, it said.
The oil and gas producers said the upstream oil and gas sector was the backbone of Pakistan’s economy as it was currently producing 3,227mmcfd gas which comprises over 30pc of primary energy consumption of the country.
Exploration, production firms threaten to suspend activities
Staff ReporterJuly 19, 2023
ISLAMABAD: Petroleum exploration and production companies operating in Pakistan threatened on Tuesday to suspend activities over non-payment of their dues worth over Rs1.3 trillion (about $4.65 billion) by the Sui gas companies.
In a letter to Finance Minister Ishaq Dar, Minister of State for Petroleum Dr Musadik Malik and the relevant agencies and companies, the Pakistan Petroleum Exploration & Production Companies’ Association (PPEPCA) said they had been taking up the matter with the government and companies concerned since September last year, but their dues continued to grow and the payments they get were not even sufficient to cover taxes they pay to the government.
“The payment made by Sui companies is not even sufficient to cover payment of 18 per cent sales tax and 12.5pc royalty and advance income tax and as a result nothing is available to fund the operating, development and exploration expenditures,” said the PPEPCA.
Under such circumstances, companies are forced to borrow funds at exorbitant rate of 25-30pc to run the gas production operations and have shelved most of the planned exploration and development drilling activities, it said.
The oil and gas producers said the upstream oil and gas sector was the backbone of Pakistan’s economy as it was currently producing 3,227mmcfd gas which comprises over 30pc of primary energy consumption of the country.
Exploration, production firms threaten to suspend activities
State reason as non-payment of their dues worth over Rs1.3tr (about $4.65bn) by Sui gas companies.
www.dawn.com
