ISLAMABAD: The Chinese government has urged Pakistan to ensure payment of $220 million in long-standing dues owed to United Energy Pakistan (UEP), a subsidiary of China’s United Energy Group, officials said.
According to sources in the Petroleum Division, Pakistan’s ambassador in Beijing sent an urgent note stressing that the dues relate to gas supplied by UEP to Sui Southern Gas Company (SSGC), which currently receives 260-270 million cubic feet per day (MMcfd). Liquidity constraints have reportedly forced the UEP to lay off staff in recent weeks.
The Special Investment Facilitation Council (SIFC) has also called for immediate resolution of the dues, citing the importance of protecting foreign investor confidence. The SSGC, however, has claimed that its refunds from the Federal Board of Revenue (FBR), worth billions of rupees, are pending and must be cleared before it can settle UEP’s payments.
The UEP acquired BP Pakistan’s assets in 2011, renaming the company. In 2012, it secured a $5 billion credit line from China Development Bank for local operations and potential acquisitions. In 2018, the UEP acquired OMV’s gas fields in Pakistan for $192 million, expanding its portfolio further. By 2019, the UEP had become the largest foreign oil and gas E&P company in Pakistan, ranking 9th among all exporters with $227 million in exports. The company operates extensive gas fields across Sindh province, including Badin, Tando Muhammad Khan, Thatta, Hyderabad (rural), Matiari, Sanghar, Mirpurkhas and Khairpur. It also maintains four offshore exploration blocks in the Arabian Sea and recently won two onshore blocks, Digri and Sanghar South, adjacent to its Mirpurkhas-Khipro concessions.
Officials warn that timely resolution of the dues is critical not only for UEP’s operations but also to maintain investor confidence in Pakistan’s energy sector, which is already under stress from liquidity and regulatory pressures.
