ISLAMABAD: China has urged Pakistan to expedite the payment of $220 million in outstanding dues owed to United Energy Pakistan (UEP), highlighting growing concerns over investor confidence in the energy sector.
Officials in the Petroleum Division said Pakistan’s ambassador in Beijing sent an urgent communication emphasizing that the dues relate to gas supplied by UEP to Sui Southern Gas Company, which currently receives 260–270 MMcfd of gas. Due to liquidity constraints, UEP has reportedly begun laying off staff.
The Special Investment Facilitation Council has also called for immediate resolution, warning that delays could undermine foreign investor trust. However, SSGC maintains that it cannot settle payments until its own pending refunds from the Federal Board of Revenue—worth billions of rupees—are cleared.
UEP, a subsidiary of China’s United Energy Group, has a significant footprint in Pakistan’s energy landscape. It acquired BP Pakistan’s assets in 2011 and later secured a $5 billion credit line from China Development Bank. In 2018, the company expanded further by acquiring OMV’s gas fields for $192 million.
By 2019, UEP had emerged as the largest foreign exploration and production (E&P) company in Pakistan, operating across key districts in Sindh including Badin, Thatta, Sanghar, and Mirpurkhas, along with offshore blocks in the Arabian Sea and newly awarded onshore concessions.
Officials warn that resolving the payment dispute is critical not only for sustaining UEP’s operations but also for maintaining confidence among foreign investors at a time when Pakistan’s energy sector faces mounting financial and regulatory challenges.
Story by Khalid Mustafa
