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Security issues causing hydrocarbon production limitations

The oil and gas exploration and production industry has been irked with the security issues prevailing in the country, causing risk of loss and production limitations, said an official on Monday.

Chaudhry Mohammad Shafi Arshad, chairman of the Oil and Gas Development Company Limited (OGDCL), said that security concerns in the shape of armed conflict, terrorism, insurgency and political instability constitute security risk and adversely influence the company operations, causing risk of loss or production limitations, threat to the lives of the workers performing duties in these affected operational areas.

“Exposure to such risks act as an impediment in the smooth running of the company operations, particularly in the provinces of Khyber-Pakhtunkhwa and Balochistan. This is potentially detrimental as the company’s exploration, drilling and development activities are hampered due to unfavourable security situation, resulting in affecting the company’s sustainable growth,” he said in a report to the company’s directors.

Asim Murtaza Khan, managing director of the Pakistan Petroleum Limited (PPL), said that security issue in Balochistan is not only causing them an additional cost but the exploration activities are also being disturbed.

“The government is quite helpful but the security situation is the biggest hurdle. There are several tribal heads in Balochistan and KPK and they all demand extortion even before the start of the operations, which is a big turnoff for foreign joint venture partners and consultants.”

“They abandon the work and go back then we have to lure them back here, which takes a lot of time. This is the main reason of delays,” said Khan.

“The issue is very complicated as the picture is not visible. We do not know who is sabotaging, hence, we can’t get them to talks to bargain. This situation is the biggest deterrent for foreign investment,” he added.

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