A shortage of electricity, volatility in fuel prices, a growing circular debt, and dependence on foreign oil and liquefied natural gas have made Pakistan’s energy crisis a matter that endangers the country’s security, manufacturing, and development. External factors, including the war in Ukraine, tensions in the Middle East, prolonged global market instability, and volatile energy prices, have demonstrated, often at great economic cost, just how heavily Pakistan’s economy depends on development beyond its borders.
The energy sector in Pakistan has undergone many changes. Conventional oil and gas resources are being depleted, while energy demand continues to grow with demographic expansion, rural-urban migration, and a developing infrastructure industry.
Alongside this, an increase in fuel import expenditures takes a chunk of the country’s forex, a big deal as it further strains a shaky economy. Such a big difference between domestic production and nationwide demand is a major warning signal. OGDCL must carry the burden, but on the side of Pakistan’s energy planning, a parallel evolution is also a reality.
One way to ensure a stable supply is through exploration within the country of unconventional reserves. Apart from that, a good amount of shale gas and gas-tight formations can be found in Pakistan if the exploration efforts are done at the right pace and scale, and similarly, the offshore and frontier blocks are underexplored compared to other countries. It was only through innovative techniques, technology adoption, and a steady capital input that a country the size of the US achieved this kind of energy self-reliance through unconventional sources.
Although Pakistan’s geological conditions and financial constraints differ, the fundamental lessons remain applicable. Energy security is achieved through sustained exploration, technological research and development, and long-term energy planning. Recently, OGDCL has made progress through the exploration of unconventional resources, and it is a big step for now, but this potential can only be actualized with the help of supportive government policies, private-sector input, international technology cooperation, and regulatory certainty.
Pakistan’s energy sector has a significant role to play in its modernization efforts. National oil enterprises are nowadays not only confined to drilling and hydrocarbon production tasks but are also adopting digitalization, artificial intelligence, predictive maintenance, advanced seismic imaging, and data analytics at both technical and managerial levels to enhance efficiency, productivity, and cost containment, for instance, by identifying the optimal time of maintenance through artificial intelligence rather than regular scheduled maintenance. OGDCL, for example, by getting involved in transformation through digital means and by deploying such digital capabilities and tools, would significantly increase its chance of hitting the right place under the right conditions in its field, i.e., exploration, improve the management of its productive fields, and enhance the quality of the decisions that the management makes. Technological modernization, while once a means of outplaying competitors, has now become a strategic requirement for long-standing sustainability in an ever-changing complex energy environment.
Nonetheless, energy security of Pakistan should not be interpreted as increasing production of fossil fuels, as is being suggested by some quarters. Investment priorities, environmental standards, and energy policies are changing as a global energy transition is underway. While developed economies are making rapid progress in moving towards renewable energy, Pakistan requires a sensible strategy that will consider its current state of the economy. Sudden withdrawal from oil and gas production could lead to further import dependency instead of alleviating it. Therefore, natural gas is a form of fuel that, in addition to being a transition fuel for the environment and economy, can also be of great economic interest for a country until the clean energy sources gradually start to dominate within the country’s total energy mix. In this respect, OGDCL’s focus on environmental, social, and governance (ESG), reductions in emissions, and new energy technologies shows that OGDCL is a step ahead of the rest with such a futuristic mindset that it realizes the future of energy is not only about hydrocarbon resources.
But the attainment of energy security should not be a task that has to be fulfilled entirely by OGDCL either. An adaptable energy infrastructure demands joint work among various concerned parties. A solid legal basis needs to be built and maintained by the legislators that will provide assurance to investors that their money will be protected. The local players will naturally respond to better financial incentives by taking an active interest in the frontier and developing their know-how. Colleges and the research centers must work close to the oil and gas business to develop the technical skills of the young generation. Energy banks have important roles to play as they need to be the facilitators of investment in infrastructure projects, and on the other hand, the local and federal administrations need to work hand in hand to be fast-tracked in the matter of permits and infrastructure development and to maintain transparent governance. As a matter of fact, energy security is the result of the synergy achieved by a whole network of the parties concerned and not the outcome of what a single firm accomplishes.
In an environment where energy scarcity and energy price volatility become the order of the day in many countries, the energy question is closely related to that of national security. The availability and affordability of energy largely determine whether the local industries can remain competitive when exporting to external markets, whether employment opportunities arise or not, whether production in the agricultural sector is sufficient to feed the population or not, and, in general, the resilience and development of the country’s economy. A country that depends significantly on importing energy from outside is vulnerable to external pressures, financial crises, and political upheavals. In an environment where the international political scene is ever more unpredictable, it seems a sound decision to regard the development of native energy sources not only as a means of ensuring greater control over domestic energy but also as a strategy that contributes to the preservation of national capabilities and resilience.
As Pakistan takes steps toward sustainable development, OGDCL will certainly keep playing a major role in the country’s energy setup. With its extensive track record, vast network of facilities, and expertise in technological matters, the company holds strong potential to spearhead the exploration and production of domestic oil and gas resources. Still, tomorrow’s energy mix requires that oil and gas companies look not only after their own interests but also cooperate to build a system that is both environmentally and financially sustainable. In fact, OGDCL, as the country’s main energy provider, might be the one to lead Pakistan on the energy security path. Nevertheless, this leadership cannot be at OGDCL’s level. It must be turned into a broad national energy policy that considers energy affordability, sustainability, and strategic independence. When that is the case, Pakistan will really have a long-term energy strategy in place.
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The views and opinions expressed in this article/paper are the author’s own and do not necessarily reflect the editorial position of Paradigm Shift.
Muhammad Subhan Zuberi is an undergraduate student of International Relations at Bahria University, Islamabad. My research interests lie in International Relations, Great Power Relations, and Public Policy.
