The Kuwait Foreign Petroleum Exploration Company (KUFPEC) is exiting Pakistan’s oil and gas sector, selling its assets worth $60 million to Pakistan Exploration (Private) Limited (PEL). This marks another departure of a foreign energy firm from Pakistan, as mounting challenges in the sector continue to drive companies away, according to a national daily.

KUFPEC’s decision to withdraw is attributed to the worsening circular debt crisis in the gas sector, which has reached an alarming Rs. 2,700 billion. Of this, Rs. 1,500 billion is owed to local and foreign exploration and production (E&P) companies. Additionally, a prolonged 12-month delay in amending the 2012 E&P policy further discouraged KUFPEC from continuing its operations in the country.

KUFPEC, a subsidiary of Kuwait Petroleum Corporation, has been active in Pakistan’s energy exploration since 1981. The company had previously sought to expand its presence through partnerships with local entities such as the Oil and Gas Development Company Limited (OGDCL) and Mari Petroleum Company Limited (MPCL). However, its abrupt exit just a year after these efforts has raised concerns among policymakers about the future of foreign investment in Pakistan’s energy sector.

In a statement, PEL emphasized the strategic importance of this acquisition in expanding its exploration portfolio and addressing Pakistan’s growing energy demands. The company confirmed the deal but refrained from disclosing financial details due to a non-disclosure agreement. The acquired assets include concessions in Dadu, Kirthar, Tajjal, and Qadirpur, as well as the Bhit and Qadirpur leases.

KUFPEC’s exit highlights the growing challenges faced by Pakistan’s oil and gas sector, including financial instability and policy delays, which continue to deter foreign investors. The development underscores the urgent need for reforms to attract and retain investment in the country’s energy industry.