ISLAMABAD: Pakistan’s oil and gas sector fell short of key production targets in fiscal year 2025-26, reflecting ongoing challenges in upstream output, exploration activity, and declining performance of mature hydrocarbon fields, according to the Annual Plan 2026-27.
The sector showed a mixed performance, with crude oil and natural gas production remaining below targets. Indigenous crude oil production reached 23.85 million barrels, against the target of 25.18 million barrels, achieving around 95% of the goal. Natural gas output stood at 1.07 trillion cubic feet (tcf) compared to the target of 1.16 tcf, highlighting continued depletion pressures in aging gas fields.
In contrast, some segments performed better than expected. Local liquefied petroleum gas (LPG) production reached 0.767 million tonnes, surpassing the target of 0.567 million tonnes, while coal output also exceeded expectations at 21.147 million tonnes against the target of 20.47 million tonnes.
However, LNG imports fell short of planned levels due to external disruptions, with 5.26 million tonnes imported against the target of 6.5 million tonnes, reportedly impacted by regional tensions in the Middle East. LPG imports, on the other hand, exceeded expectations at 1.5 million tonnes compared to the target of 1.05 million tonnes to meet domestic demand.
Exploration activity remained significantly below target, with only 36 wells drilled (12 exploratory and 24 development wells) against a planned target of 87 wells, indicating reduced upstream momentum. Despite this, the sector reported 17 hydrocarbon discoveries, including one oil and 16 gas or condensate finds, while 16 prospecting licences were issued to exploration companies.
On the infrastructure side, Sui Northern Gas Pipelines Limited (Sui Northern Gas Pipelines Limited) and Sui Southern Gas Company Limited (Sui Southern Gas Company Limited) collectively added 383,220 new consumers, below the target of 429,220, though both utilities met their pipeline expansion goals of 3,707 km.
The Petroleum Division executed one PSDP-funded project during the year — the expansion and upgradation of the Pakistan Petroleum Corehouse (PETCORE) — with an allocation of Rs245 million aimed at strengthening research and operational capacity in exploration activities.
Private sector investment remained a key driver, with exploration and production companies investing Rs446.082 billion, while the LPG sector contributed Rs100 million.
For FY2026-27, the government has set higher production targets, including 25.38 million barrels of crude oil, 1.29 tcf of natural gas, 24.53 million tonnes of coal, and expanded infrastructure goals such as 609,740 new gas connections and 2,560 km of pipeline expansion.
Authorities also plan to advance strategic projects such as the TAPI Gas Pipeline, alongside new PSDP initiatives aimed at improving geological data, boosting exploration activity, and unlocking untapped hydrocarbon reserves to strengthen long-term energy security.
Story by ZAFAR BHUTTA
