SINDH ENERGY DEPARTMENT

FTN: 8537-9031074​

Directorate of OIL & GAS

 

Following the 18th Constitutional Amendment and subsequent amendments in the Sindh Government Rules of Business, the SGA&CD vide Notification No. SORI(SGA&CD)2-4/2001 dated 13th November, 2013 has established, the Directorate of Oil & Gas in the Energy Department, Government of Sindh to address the growing requirements of the Oil & Gas sector.

 

The core mandate of the Directorate is to develop policies, create a regulatory framework, resolve technical matters, and ensure smooth execution of Oil & Gas activities in Sindh. The Directorate also includes the Provincial Director, Directorate General of Petroleum Concessions (DGPC), Islamabad, who represents Sindh’s interests at the federal level and contributes towards facilitation of Oil & Gas Exploration & Production (E&P) Companies operating in Sindh Province.

 

Sindh is endowed with significant oil and gas reservoirs and plays a pivotal role in Pakistan’s energy sector. The Province contributes approximately 65% of the country’s natural gas production, ranging between 1,800–1,900 MMCFD, and around 40% of national crude oil production, averaging 24,000–25,000 BOPD. In view of its strategic importance in the national energy mix, the Directorate of Oil & Gas is committed to safeguarding provincial interests, facilitating oil and gas operations, supporting sustainable development of indigenous energy resources, and promoting an enabling environment for growth of the petroleum sector in Sindh.

 

Functions

 

The core functions of the Directorate of Oil & Gas are:

 

  • Coordination with the Directorate General of Petroleum Concessions (DGPC), Directorate General of Gas, and other Directorates of the Ministry of Petroleum & Natural Resources, Government of Pakistan, regarding all issues relating to Oil & Gas, including issuance and renewal of Petroleum Concession Agreements, Gas Concession Agreements, and provision of data for Royalty, Production Bonus, Social Welfare, Marine Research, etc.

 

  • Coordination with OGRA and attendance in public hearings as intervener for determination of gas prices for SSGCL, amendments in license conditions of SSGCL, and other related matters.

 

  • Coordination with the concerned district administration and LEAs regarding law and order situations faced by E&P Companies. Confirmation of receipts under the heads of Royalty, Social Welfare Obligations, Production Bonus, and Marine Research Fee deposited by the E&P Companies with the concerned districts. Enforcement of LPG prices notified by OGRA through District Administration, and action against illegal sale and storage of petroleum products.

 

Petroleum Receipts

 

Oil and Gas (Exploration & Production) Companies operating in Sindh deposit following funds:

 

  • Production Bonus :

 

Under Para 4.1.2, Petroleum Policy 2012, Production Bonuses are payable on a contract area basis.

  • Social Welfare Funds :

 

The E&P Companies contribute in the social welfare in pursuance of Annex-3 of Petroleum Policy 2012.

 

  • Marine Research and Coastal Development Fee:

 

In pursuance of Para 5.9 of Petroleum Policy 2012 “Marine Research and Coastal Area Development Fee” are charged to E&P Companies engaged in offshore exploration and production.

 

  • Royalty:

 

In pursuance of Article 161(1)(a) of the Constitution of Pakistan Royalty of natural gas is collected by the Federal Government after which the due provincial share is transferred to the Provincial Government.

 

  • Windfall Levy:

 

Under Article 172 read with Article 154, the benefit of Windfall Levy will be shared and distributed among Federal Government and the concerned province on 50:50 basis.

Guidelines for utilization of Social Welfare Funds and Marine Research & Coastal Development Fee are issued by the Federal Government, whereas guidelines for utilization of Production Bonus are issued by the Government of Sindh. Royalty and Windfall Levy are calculated by the Federal Government, after which the due provincial share is transferred to the Provincial Government.

 

Major Achievements

 

  • Energy Department, Government of Sindh established Sindh Energy Holding Company Limited (SEHCL) under Companies Ordinance, 1984, and acquired 2.5% working interest in nine (09) exploration blocks and on full participation basis in two (02) exploration blocks in Sindh under Petroleum (Exploration & Production) Policy, 2012 through Sindh Energy Holding Company Limited (SEHCL). These blocks include Ranipur, Shahbandar, Sawan South, South West Miano-III, Khewari East, Gambat-II, Murradi, Mithani, Sehwan, Sujawal South, and Sukhpur-II, operated by OGDCL, PPL, UEP, and Prime Global Energies Limited.

 

  • Energy Department, with approval of the Competent Authority, issued revised guidelines dated 01st August, 2024 for utilization of Production Bonus funds deposited by Exploration & Production Companies operating in Sindh through Petroleum Social Development Committees (PSDCs).

 

  • In pursuance of Petroleum (Exploration & Production) Policy, 2012 and revised Guidelines for Utilization of Funds deposited by way of Production Bonus by E&P Companies, Energy Department vide notification dated 23rd November, 2024, with the approval of the Competent Authority i.e. Honourable Chief Minister Sindh, nominated Chairpersons of Petroleum Social Development Committees (PSDCs) for oil and gas producing districts.

 

  • Appointment of Provincial Director, Sindh, DGPC, Ministry of Energy (Petroleum Division), Government of Pakistan, Islamabad, was made to safeguard the interests of the Province.

 

  • As per approval of the Council of Common Interests (CCI), 50% share of receipts collected under the heads “Windfall Levy on Crude Oil” and “Discount Retained on Crude Oil,” proposed by the Government of Sindh through a Summary for CCI, is being transferred as straight transfer to concerned Provinces.

 

  • The Directorate of Oil & Gas, Energy Department, Government of Sindh, achieved a significant milestone by allowing M/s Pakistan Gas Solutions Limited (PGSL) to conduct a feasibility study for development of Keti Bunder Port as a strategic LNG/RLNG and LPG import hub. This initiative aligns with Sindh’s vision to enhance energy infrastructure, promote private sector investment, and reduce reliance on existing port facilities. The matter was placed before the Sindh Cabinet, and following approval in its meeting held on 4th December, 2024, the Energy Department issued Letter of Support to M/s Pakistan Gas Solutions Limited (PGSL) on 20th December, 2024. The study is being conducted entirely at PGSL’s own risk and cost, ensuring no financial obligation on Government of Sindh while fostering investment in critical energy infrastructure.

 

  • The nomination of Secretary Energy, Government of Sindh, on the Board of Directors of OGDCL, upon its request, is a positive step towards ensuring provincial representation in key oil and gas federal organization. The matter regarding representation of the Province on the Boards of other federal organization e.g. PPL, SSGCL, and PSO shall continue to be pursued with the Federal Government to ensure due provincial participation in these strategic organizations.

 

  • The Directorate of Oil & Gas played its role as the Administrative Department in connection with the gas supply programme. The Department facilitated and supported implementation of the gasification programme in various villages and towns across Sindh. As a result of these efforts, 880 villages were gasified by SSGCL.

 

  • The Directorate of Oil & Gas has consistently pursued the matter of lifting the moratorium on new gas connections imposed by the Federal Government on 3rd December, 2021, considering the longstanding demand of the Province and public requirement. As a result, the Federal Government lifted the four-year ban on new domestic gas connections in September, 2025, enabling provision of new RLNG-based domestic gas connections.