Pakistani militants try to paralyse economy, report says

Attacks on oil, gas fields part of strategy

By Arslan Rana

2011-03-11

ISLAMABAD – Militants bent on paralysing Pakistan's struggling economy are targeting its oil and gas fields and energy delivery network, according to a report by the ministry of petroleum and natural resources.

The report, submitted to Pakistani President Asif Ali Zardari and Prime Minister Yousuf Raza Gilani in February, noted that terrorists have targeted two major Pakistani gas fields – the Manzalai field in Kohat District. Khyber Pakhtunkhwa (KP) and the Zamzama field in Sindh.

Terrorists attacked two vans carrying Pakistanis employed by Hungary's MOL Group January 20, killing two workers and four security guards and kidnapping two workers. The workers were heading to Manzalai. Terrorists are still holding the abducted employees.

Terrorists also fired rockets at the gas field February 15.

Sui Northern Gas Pipeline Co. (SNGPL) Managing Director Rashid Lone accused terrorists of severing a pipeline at Zamzama, a field owned by Australia's BHP, in February, Dawn reported. That act took 190m cu. ft. of gas out of the system, Lone said.

Terrorists have threatened to attack that field too, the report said.

Such attacks make it extremely difficult for the Sui Southern Gas Co. (SSGC) and SNGPL to deliver gas to consumers, the report said. SSGC and SNGPL are responsible for distributing gas to Pakistan’s four provinces and the Pakistani-administered part of Kashmir.

Companies curtail drilling, exploration

MOL Pakistan has reacted to the violence by saying it cannot endanger its employees and will suspend drilling at Manzalai, MOL Pakistan spokesman Aniq Zafar told Central Asia Online. BHP exploration at Zamzama also has been halted indefinitely because of security problems.

With exploration at those gas fields shut down, SNGPL and SSGC are helpless to prevent even more power outages from affecting Pakistani businesses and households, the report said. SNGPL also is unable to supply gas to independent power producers starting March 1.

The government wants the gas fields working again and has promised to protect the workers.

“The federal government is going to provide extra security cover to exploration and production companies, including MOL and BHP... in relatively difficult areas,” Pakistani Secretary of Petroleum and Natural Resources Imtiaz Qazi said.

The federal government is discussing the terrorist attacks on oil and gas fields with the concerned provincial governments and Frontier Constabulary (FC) in order to protect petrochemical workers, Qazi added. However, he ruled out the possibility of deploying the army.

MOL has shown willingness to re-explore Manzalai, Qazi said, expressing hope the two kidnapped employees would be freed someday.

The federal government also is negotiating with the Balochistan provincial government to provide enough security to the state-owned Oil and Gas Development Co. (OGDC) so it can resume exploration work in troubled Balochistan, the most resource-rich of Pakistan's provinces, Qazi said.

Militants killed five OGDC workers in Balochistan March 10 when they attacked a company van, and fired rockets at its Uch gas field (Pakistan's third largest) February 25, killing two workers.

Attacks make power shortages worse

Since 2005, Pakistan has faced acute power shortages that are crippling the economy. Declining gas production, caused by militant violence and field depletion, frequently forces Pakistan's power plants simply to halt, leading to outages called load shedding. Factories and households endure load shedding of 10 to 12 hours daily.

In the summer. Pakistan can only generate about three-quarters of the energy it needs, with daily power shortfalls as high as 5,500MW.

Terrorism and gas field depletion combined make the electrical and economic picture bleak. Major fields like Sui in Balochistan and Qadirpur in Sindh are running out of gas, according to official statistics. New discoveries do not match the size of the reservoirs Pakistani geologists found in the 1960s.

The country faces a difficult time ahead on gas availability, SNGPL's Lone told Central Asia Online by phone from Lahore.

“With declining local production, SNGPL is left with no other option but to resort to long hours of gas load shedding for all consumer categories,” he said.

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