Development of gas fields in Baluchistan vital for Pakistan’s future

Baluchistan remains a puzzle for those both inside and outside of Pakistan. Resource-rich, yet chronically under developed, the country’s least populous province has been blighted by an ongoing insurgency for more than two decades. The security challenges for those working in the energy and mining sectors are not to be underestimated, with even ‘frontier’ firms considering the region too dangerous in the current climate, despite the expectation of large reserves of oil and gas, gold, copper and numerous minerals.

As a hotbed for separatists, Islamic fundamentalists, and those involved in kidnapping and narcotics trading (often the lines between these various activities are blurred) oil and gas facilities, as well as personnel in Baluchistan are singled out as direct targets. The number of locals ‘missing’ runs into the thousands and the Frontier Constabulary guards, who will eventually take over security from the army in some areas, claim more than 60 attacks have taken place in the last three months, with eight people, including oil workers and security guards reported killed. The Punjabi government and the army are reviled in many places for their suspected involvement in these incidents, which some Baluchis claim allows them to bypass the judicial system and act with impunity. The army and intelligence agencies strenuously deny such allegations but this reputation puts additional pressure on those seeking to defend oil and gas fields in terrain already recognised as difficult to police.

There is also evidence of the transmission of tactics from other militant groups reaching those in Baluchistan, as evidenced by a suicide attack in the capital, Quetta in March 2011. The target, the home of a senior police officer, was not unusual considering the MO of Baluchi separatists and other militant groups operating there, but vehicle-borne suicide attacks of this nature are rare. This could be evidence of a change in tactics among dissident groups and suggests co-operation and information sharing between certain Baluchi groups and those based in the northwest.

Successful attacks on infrastructure can lead to significant power outages. After militants blew up a gas pipeline in the Pat Feeder area of Baluchistan in February, tens of thousands of people in the region were left without gas and it took several days for services to resume. This sort of incident can in turn lead to unrest in urban areas, crippling business activities and straining civilian life, particularly during the winter months.

Pakistan’s state-run Oil and Gas Development Company Limited (OGDCL) is only now finally starting exploration work on the Zin bloc, in Dera Bugti, more than 20 years since the licence was first issued. The army has allowed exploration to go ahead after apparent improvements in the security situation.

The importance of this exploratory work cannot be over-stated. The Sui bloc, which has effectively helped power the country since its inception, is being depleted, and the country desperately needs a new large discovery to feed Pakistan’s growing requirements, as demand for gas exceeds supply by a quarter. Currently around half of the country’s energy needs come from gas and while it would take some years to become fully operational, the development of the Zin bloc would ease the pressure on the federal government, particularly by reducing their dependency on regional importers and helping stop the vast outages which blight the country. Whether the security situation will allow for this to happen, or whether separatists will continue to disrupt the development of the Zin bloc, is difficult to predict, but those with a vested interests in the stability of Pakistan should watch these developments closely.

Author
Fraser Bomford, Head of Intelligence, AKE Ltd.
fraser.bomford@akegroup.com

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