COMMENT: Energy and security go together —Naseem Ali Khan - Thursday, April 21, 2011

The government is yet to realise that over the past one decade, the energy hub of the country has gradually shifted from the south to the north and the given regions alone are contributing around 10 percent and 35 percent, respectively, of aggregate indigenous production of gas and crude oil 

In a country where, at present, nothing seems to be succeeding except the Taliban and narcotics smugglers, economic activity is poised on a very fragile structure, thus remaining vulnerable to even the smallest detrimental development. Therefore, what happened to a convoy of a foreign oil company in KPK near Kohat on January 20, 2011, though it got little coverage in the press, may cast a long shadow on the economy of the province and the country for a long time. On the given date, in broad daylight, a small convoy of the oil field workers was, reportedly, ambushed by a mob of 30 to 40 terrorists at the border of Kohat and Hangu districts during which six personnel, including four Frontier Constabulary (FC) guards, were brutally killed, and two workers of the Hungarian company MOL abducted. Not only that, in order to make it more gruesome, the corpses of two of the FC guards were burnt at the site by the terrorists.

As a result of the above incident, the said oil company has closed all of its operations in the area, resulting in curtailment of 40 MMSCFD (million standard cubic feet per day), around one percent of aggregate national production, of the much-needed natural gas. This, in turn, means greater load shedding of gas, more consumption of petrol, increased transportation tariffs and thus more import of petroleum products, which would consequently cause a further impact upon the already flagging economy. This is saddening, especially when the given field can contribute at least four billion rupees a year in terms of royalty and taxes alone, i.e. in addition to contributing directly vide its production of gas and oil and while the aggregate requirement of CNG for the whole north of the country is just around 30 MMSCFD. This scribe visited the area and found almost no signs of the writ of the state in wide stretches of land. Even where its presence was observed, it was quite rudimentary and weak.

All of this is happening in an area, which has gradually emerged as the backbone of the economy with respect to provision of energy security to the country. The government is yet to realise that over the past one decade, the energy hub of the country has gradually shifted from the south to the north and the given regions alone are contributing around 10 percent and 35 percent, respectively, of aggregate indigenous production of gas and crude oil. The given production, while on the one hand is proving greatly helpful in fulfilling the energy requirements of the country, on the other it is contributing at least 40 billion rupees annually to the national kitty in terms of royalty and taxes alone. This is in addition to the annual savings of around six billion rupees in terms of compression cost, which the pumping of corresponding volumes of gas from south to north would have entailed.

Another major sign of the state’s dwindling authority in the area is the fact that after the discovery of gas one can observe a whole network of gas supplies to local villages spread over hundreds of kilometers. Natural gas already stands supplied to around 45 villages and adjoining towns and the network is continuously spreading further as can be seen by any visitor to the area. However, Sui Northern Gas Pipelines Limited (SNGPL) — the pertaining utility company — has not been able to collect a single penny against domestic sales since their commencement. The lost revenue amounts to around 0.15 billion rupees per month, which would only grow with the passage of time if the state does not awaken soon to implement its writ.

It would not be out of place here to mention that a few months back an agreement was signed among the relevant stakeholders for the construction of a modern bridge at Khushalgarh to facilitate transportation of crude oil from the recent oil discoveries in KPK. Though the construction of the bridge was scheduled to commence months ago but, reportedly, some honcho in the planning commission has been sitting upon the required approval for unknown reasons for many months. This is despite the fact that the project of the new bridge has been in the government’s plans at least since 1985 but only reached this stage when two oil companies operating in the adjoining area offered to share its cost by at least 50 percent. And then we talk about facilitating investors.

All this is happening in a country and a province where, let alone any foreign investors, even its own entrepreneurs are reluctant to invest. In such circumstances any investor who is already there needs to be given all possible facilitation and protection, whereas the above-mentioned events seem to be leading in the reverse direction which may compel even such investors to reconsider their current status. Though quite pessimistic, but this is a realistic view of the situation.

With this state of affairs, how can one expect that the country can be driven onto the path of prosperity, success and development? I have heard that the given region alone has the potential to make Pakistan achieve the target of self-sufficiency in energy within a short period of three to four years; however, the same is subject to the provision of a safe working environment for oil and gas exploration and production companies. If this cannot be done, then we do not seem to be far away from observing the crumbling and withering away of even the last rudiments of our state structure in large parts of the country and their getting lost to lumpen elements for years to come. The process, sadly, already appears to be at quite a mature stage in many areas of the country, including Balochistan (which is almost half of Pakistan in terms of geography). But, with our nuclear arsenal and geo-strategic location, if we do not attend to the issues ourselves, would the international powers allow that to happen or choose to intervene, thus further compromising our sovereignty, is an issue that needs to be pondered upon.

The writer can be reached at

Source :\04\21\story_21-4-2011_pg3_6

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