China has urged the Government of Pakistan to clear around $220 million in overdue payments owed to United Energy Pakistan (UEP), increasing pressure on Islamabad to address liabilities to foreign investors amid ongoing financial constraints in the energy sector.
The request was conveyed through diplomatic channels after Pakistan’s ambassador in Beijing highlighted that the dues relate to gas supplied by UEP to Sui Southern Gas Company, which currently receives around 260–270 million cubic feet of gas per day from the company.
Reports indicate that liquidity issues caused by delayed payments have already forced UEP to scale back operations, including staff layoffs.
The Special Investment Facilitation Council has also called for urgent resolution of the issue, warning that continued delays could damage investor confidence at a time when Pakistan is actively seeking foreign investment in its energy sector.
SSGC, however, maintains that its ability to clear the dues is limited due to pending tax refunds worth billions of rupees from the Federal Board of Revenue, which it says must be released before payments can be made.
UEP, a subsidiary of United Energy Group, entered Pakistan’s market after acquiring assets of BP Pakistan in 2011. It later secured a $5 billion credit line from China Development Bank and expanded further by purchasing gas fields from OMV Pakistan in 2018.
Today, UEP is one of the largest foreign exploration and production companies operating in Pakistan, with assets spread across multiple districts in Sindh and offshore blocks in the Arabian Sea.
Officials say resolving the payment dispute is critical to maintaining UEP’s operations and safeguarding investor confidence in Pakistan’s energy sector, which continues to face financial and structural challenges.
