ISLAMABAD: China has pressed Pakistan to immediately clear $220 million in outstanding payments owed to United Energy Pakistan (UEP), warning that further delays could damage investor confidence and affect operations.
According to sources in the Petroleum Division, Pakistan’s ambassador in Beijing sent an urgent note highlighting the seriousness of the issue. The dues are for gas supplied by UEP to Sui Southern Gas Company (SSGC), which receives 260 to 270 million cubic feet per day (MMcfd).
Liquidity problems have already forced UEP to lay off some staff in recent weeks.
The Special Investment Facilitation Council (SIFC) has also called for the early resolution of these payments, stressing the need to protect foreign investor confidence in Pakistan’s energy sector.
SSGC Blames Pending Refunds
Sui Southern Gas Company, however, says it cannot clear the dues until it receives billions of rupees in tax refunds from the Federal Board of Revenue (FBR).
UEP, a Chinese company, acquired BP Pakistan’s assets in 2011. It later bought OMV’s gas fields in Pakistan for $192 million in 2018 and has since become the largest foreign oil and gas exploration and production company in the country.
The company operates major gas fields across Sindh province, including areas in Badin, Tando Muhammad Khan, Thatta, Hyderabad, Matiari, Sanghar, Mirpurkhas, and Khairpur. It also holds four offshore exploration blocks in the Arabian Sea.
Officials warn that timely payment is crucial not only for UEP’s smooth operations but also to maintain Pakistan’s credibility with foreign investors at a time when the energy sector is already facing liquidity and regulatory challenges.
