Islamabad: Pakistan’s Petroleum Division is facing heightened turmoil as disagreements over gas allocation policies and other key petroleum issues have led to the resignation of another senior official.

According to sources, the Petroleum Minister, Musadik Malik, has reportedly refused to cooperate with both the Secretary Petroleum, Momin Agha, and Additional Secretary Petroleum, Zafar Abbas, creating a major impasse within the division. This dispute follows a recent decision by a committee led by Deputy Prime Minister Ishaq Dar, which approved a plan to allocate 35% of gas to third parties, capped at 100 million standard cubic feet per day (mmscfd), by oil and gas exploration firms.

The move, widely welcomed by the oil and gas industry, was expected to boost the private sector’s involvement in the gas market. Industry experts anticipated benefits such as enhanced cash flows, reduced circular debt, and better financial returns for exploration companies. However, shortly after the announcement, the petroleum minister expressed his refusal to implement the policy unless both Momin Agha and Zafar Abbas were removed from their roles in the division.

As tensions grew, Zafar Abbas applied for leave and formally requested to be reassigned to another position, citing difficulties in working under the minister. This decision has jeopardized ongoing reforms, including the auction of gas discoveries to private investors by exploration and production (E&P) companies. Abbas had played a key role in developing the framework for these auctions, which had been endorsed by a task force under Ishaq Dar and aligned with directives from the Council of Common Interests issued eight months ago.

The absence of Abbas comes at a critical time, with the Executive Committee of the National Economic Council (ECNEC) set to evaluate the gas auction proposal. Concerns have been raised about the lack of senior leadership to ensure the policy’s smooth progress.

Adding to the discord, the petroleum minister accused senior officials of excluding him from significant decisions, such as agreements with Azerbaijan and managing stranded gas. During a meeting chaired by Prime Minister Shehbaz Sharif, however, these officials strongly denied the allegations and received the prime minister’s backing.

This ongoing rift has stalled efforts to privatize gas discoveries, a move considered essential for attracting investments, addressing sectoral inefficiencies, and alleviating circular debt in Pakistan’s energy sector. Notably, former Director General of Petroleum Concessions (DGPC) Kashif Ali, who also contributed to the policy draft, had been reassigned earlier under similar circumstances.

Prime Minister Shehbaz recently convened a high-level meeting with Ishaq Dar, the petroleum minister, and other senior officials to discuss the crisis. Despite clarifications from the officials and denials of wrongdoing, Zafar Abbas’s reassignment request underscores the strained relations within the division. The petroleum minister’s alleged inability to foster trust within his team has reportedly hindered the execution of critical reforms, leading to an atmosphere of low morale.

As ECNEC prepares to deliberate on key policies, including gas auctions and strategies to enhance the energy sector’s performance, the absence of senior officials raises concerns about potential delays. These reforms are vital to addressing Pakistan’s energy challenges and securing its economic stability.

In response to the controversy, the petroleum minister dismissed claims of an internal rift, labeling them as “baseless.” He stated that the PM’s office had removed the additional secretary based on an audit of administrative matters, describing the decision as routine performance management.

The ongoing discord within the Petroleum Division highlights the pressing need for improved coordination to successfully implement energy reforms critical to Pakistan’s future.

BY WPB