Poor planning stalls Pakistan’s energy projects

Pakistan's oil and gas sector has made several new hydrocarbon discoveries in recent years, creating fresh opportunities

Pakistan’s oil and gas sector has made several new hydrocarbon discoveries in recent years, creating fresh opportunities to strengthen domestic energy production. However, industry experts believe many of these projects fail to achieve their full potential because of weak planning, poor project management and delayed decision-making.

They say the biggest challenge is not the availability of natural resources but the way major development projects are planned and executed. According to experts, the success of any large oil and gas project depends heavily on timely decisions by project owners and senior management, especially when unexpected technical or commercial problems arise.

Industry specialists note that projects often begin with poorly prepared engineering studies and unclear project scopes. These weaknesses can result in the appointment of consultants who lack the necessary technical expertise, leading to design changes, construction delays and rising costs during implementation.

Experts also point to shortcomings in the way contracts are prepared and awarded. They say vague contract conditions, weak bid evaluation procedures and unrealistic commercial terms frequently create disputes between project owners and contractors. As disagreements grow, many projects become delayed or end up in lengthy legal proceedings that further increase costs.

According to industry observers, several projects have shown that timely intervention by experienced management can reverse difficult situations. In some cases, companies were able to complete delayed projects after replacing senior management, improving coordination and introducing corrective measures. These projects later became important contributors to company growth.

However, experts say other projects have experienced the opposite outcome. They argue that management changes without relevant experience have sometimes resulted in poor decisions, contract cancellations and prolonged litigation. Such developments have delayed production, increased financial losses and discouraged future investment.

Industry professionals believe the structure of Engineering, Procurement and Construction (EPC) contracts also requires significant reform. They argue that contractors are often required to maintain costly financial guarantees until long after project completion, placing unnecessary financial pressure on construction companies.

Experts recommend introducing more flexible payment schedules linked to project milestones instead of delaying large payments until the final stages. They believe this approach would improve cash flow, lower financing costs and help contractors complete projects more efficiently.

Another major concern is the shortage of experienced professionals responsible for managing technically complex projects. Industry specialists say assigning critical responsibilities to teams lacking sufficient expertise often leads to unnecessary delays, poor coordination and ineffective decision-making.

They also stress the importance of forming smaller but highly skilled project management teams capable of handling engineering, financial and commercial issues simultaneously. Strong technical knowledge combined with practical management experience, they say, is essential for overcoming unexpected challenges during project execution.

Analysts further argue that weak governance and poor corporate management continue to affect many state-owned enterprises operating in the energy sector. Delayed projects, rising development costs and inefficient decision-making have contributed to significant financial losses while limiting the country’s ability to benefit from its natural resources.