Pakistan overhauls DGPC to revitalize oil & gas sector

October 09, 2025 (MLN): Pakistan has initiated a major overhaul of the Directorate General of Petroleum Concessions (DGPC), the key regulator for the country’s upstream oil and gas sector, in a bid to streamline regulation, attract investment, and revive exploration activity amid a deepening energy crisis.

The restructuring, described by the Petroleum Division as a “sweeping reform,” aims to align the DGPC’s framework with international best practices and eliminate long-standing procedural bottlenecks that have hampered exploration and production (E&P) activity.

A notification issued on October 3 established a seven-member committee to steer the transformation.

The body, convened by the Additional Secretary (Policy) of the Petroleum Division and supported by the Director General of Petroleum Concessions as secretary, includes the managing directors of OGDCL, GHPL, and Mari Petroleum, along with a representative of the Pakistan Petroleum Exploration and Production Companies Association (PPEPCA).

The committee has been tasked with reviewing the DGPC’s mandate, organizational structure, and operational procedures.

It will propose institutional, legal, and procedural reforms designed to improve transparency, investor facilitation, and digital governance across the petroleum concessions regime.

Pakistan’s upstream sector has faced criticism for years over regulatory uncertainty and bureaucratic inertia.

Industry executives say DGPC’s cumbersome approval processes and inconsistent policy application have created what one source described as an “unpredictable operating environment” for E&P companies.

It has been a major problem, as things would get stuck for six months or more. If this reform happens, it’s a very positive development for the sector, according to critics. 

Critics also pointed to flawed policy design in areas such as tight gas, where incentives were awarded on a well-by-well rather than field-wise basis, a structure that failed to attract meaningful investment in unconventional resources.

Such inefficiencies, coupled with macroeconomic and security risks, have prompted several global players,  including BP, ExxonMobil, and Eni, to exit Pakistan over the past decade.

The Petroleum Division hopes that a restructured DGPC will restore investor confidence and reinvigorate exploration activity, which has slowed to one of the lowest levels in South Asia.

The successful implementation of the reforms could:

• Boost exploration activity by reducing procedural delays and clarifying concession policies.

• Enhance investor trust by ensuring regulatory consistency and transparent decision-making.

• Enable faster policy execution, addressing constraints that hindered previous initiatives, such as the 2020 amendments to the Model Petroleum Concession Agreement.

However, the committee’s composition, entirely federal, with no provincial representation, has raised questions about compliance with Article 172(3) of the Constitution and the Petroleum Policy 2012, both of which require provinces to be equal partners in the management of oil and gas resources within their territories.

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