ISLAMABAD: The Pakistan Petroleum Exploration and Production Companies Association (PPEPCA) has sought the Ministry of Energy’s support to resolve issue of overdue receivables of Rs 1.547 trillion owed to exploration and production (E&P) companies by the Sui gas companies, well-informed sources told Business Recorder . In a letter addressed to the top leadership of the Ministry of Energy — including the minister, secretary, and other concerned authorities — PPEPCA referred to its earlier communication dated August 22, 2025, titled “Default of SNGPL/SSGCL in Payment of Invoices of E&P Companies.” The association reiterated that Pakistan’s upstream oil and gas sector forms the backbone of the national economy. READ MORE: PPEPCA warns of legal consequences if super tax rates exceed PCAs’ According to PPEPCA, the upstream sector is currently producing around 2,684 MMscfd of gas, meeting over 30 percent of the country’s primary energy needs. However, the sector is facing a sustained decline, primarily due to the persistent default by state-owned gas utility companies in clearing overdue payments to E&P companies. As a result, the country’s gas production has declined significantly from its peak level of 4 Bcf per day. Documents showed that receivable balances have continued to accumulate over the past ten years, placing severe financial strain on upstream companies. Notably, several E&P companies exited Pakistan during this period. The PPEPCA expressed deep concern that no material improvement was observed in outstanding receivables during FY 2024–25, despite four consecutive consumer gas price increases notified on November 1, 2023; February 1, 2024; July 1, 2024; and January 1, 2025. Moreover, the latest price adjustment in July 2025 has also failed to yield any meaningful improvement in the receivable position. This situation underscores the urgent need for additional structural and financial measures to address liquidity constraints faced by gas utility companies and to revive the petroleum exploration and production sector. As of September 30, 2025, the total invoiced amount stood at Rs 1.547 trillion (excluding late payment surcharge). Of this, outstanding receivables from SSGCL amounted to Rs 826.19 billion (Rs 730.49 billion and USD 339.37 million), while receivables from SNGPL stood at Rs 720.97 billion (Rs 718.91 billion and USD 7.28 million). The participating companies included Al Haj, GHPL, KUFPEC, Mari, OGDCL, OPI, POGC, POL, PPL, Prime, and UEP. The PPEPCA noted that the figures do not reflect total upstream receivables, as some companies did not provide the required data. Under the terms of Petroleum Concession Agreements and Gas Sale Agreements, gas buyers are required to make payments within 30 days of receiving invoices. However, the ageing analysis shows that Rs 991 billion, representing 64 percent of the total outstanding amount, has remained overdue for more than one year. “The continued default by the Sui companies in settling overdue invoices owed to upstream E&P companies has severely strained the sector, triggering a critical cash flow crisis. Consequently, exploration and development activities have been curtailed, leading to a sustained decline in indigenous gas supplies. This deterioration not only threatens energy security but also erodes investor confidence, further weakening the overall investment climate,” said PPEPCA Chairman Ibrar Khan in the letter. Copyright Business Recorder, 2026