All around the world, there investment opportunities in different sectors and different countries. One of the lucrative sectors to invest in is the energy sector, and we will be focusing on the investment opportunities available in the energy sector in Pakistan.

But the question that might come to mind is whether investing in Pakistan is worth it. And apart from the energy sector, which other opportunities can you take advantage of in Pakistan. Read on to find out.

• Are There Investment Opportunities in Pakistan?
• Challenges You Might Face
• Why Should You Invest in The Energy Sector
• What is The Best Energy Company to Invest in?

Are There Investment Opportunities in Pakistan?

Before making a decision as to whether you are going to invest in Pakistan, it is important that we find if you can really invest in the energy sector of the country. Here are some details.

Toward the end of 2019, the Minister for Power Division Omar Ayub has said that there are huge opportunities of foreign investment in Pakistan’s energy sector.

Read Also: 4 Simple Investment Opportunities for First-time Investors

Talking to the Chinese Ambassador to Pakistan Yao Jing in Islamabad, he said that the government is providing all possible facilities to foreign investors to promote investment in diverse sectors. Also, the Chinese Ambassador said that Chinese investors are taking keen interest to invest in Pakistan.

While talking to Ambassador of France to Pakistan Marc Baréty, the Minister said Pakistan has immense opportunities for investment in hydropower projects. He said thousands of megawatt electricity would be produced utilizing natural flow on the Indus River. The Ambassador said that several French companies are working in the energy sector in Pakistan.

Challenges You Might Face

As a large developing country, Pakistan faces a wide range of problems, especially related to overcoming poverty and improving the health, education, and employment opportunities for low-income groups.

The energy sector is critical to progress in addressing these problems, but an inadequate investment, unreliable energy supplies, weak governance, and poor fiscal management of the sector have been major constraints.

The problem of creating a viable energy sector that can mobilize the needed investments and support sustainable economic growth is a fundamental challenge.

We are now going to examine the position of Pakistan with respect to five common challenges affecting power-sector transformation, as identified in the initial strategy report.

1. Improving governance and transparency

Although Pakistan has made progress in developing its institutions in the energy and power sectors, much remains to be done to improve their governance and transparency. A separate professional energy regulatory body, the Pakistan National Electric Power Regulatory Authority (NEPRA), has been in place since 1997; however, it still needs to improve its autonomy, authority, and accountability, becoming less dependent on the Ministry of Energy.

The evolution of energy institutions in Pakistan has been shaped by the relationship between electricity and water. The priority of water management in Pakistan and the construction of Tarbela and other major dams and hydropower plants led to the development of a combined Ministry of Water and Power, while the development of the large Sui and other gas fields was overseen by a separate Ministry of Petroleum and Minerals.

As thermal power generation expanded in the 1980s and 1990s, state utility company Water and Power Development Authority (WAPDA) was unbundled, with WAPDA retaining hydropower. At the same time, four separate state thermal companies were established in 1998, along with a separate authority for electricity transmission—the National Transmission and Dispatch Company (NTDC).

A Central Power Purchasing Agency (CPPA), responsible for billing and financial settlements, was separated from NTDC in 2015, heightening transparency in power transactions and financial relations. In the major Karachi electricity market, the main supplier is K-Electric, formerly the Karachi Electric Power Corporation.

For several years, K-Electric had been a target of acquisition by China’s Shanghai Electric Company, but the majority shareholder, the Dubai-based Abraaj Group, collapsed in 2019. Separately, many privately owned electricity generating companies (IPPs) are involved in the thermal, hydro, and renewable subsectors and have established a Pakistan Independent Power Producers Association

It was then Prime Minister Shahid Abbasi, a former minister of petroleum from the Pakistan Muslim League, who in his brief tenure succeeded in establishing the Ministry of Energy, which combined the Ministry of Petroleum and Natural Resources and the Power Division of the Ministry of Water and Power, in August 2017.

It remains to be seen whether this institutional restructuring will improve governance and transparency. Given the close relationship between electricity and gas, both indigenous and imported, the creation of a single ministry may help achieve better planning and coordination between the oil and gas and power sectors.

In general, energy policy and governance has been quite fragmented in Pakistan, involving the Pakistan Ministry of Finance, the Planning Commission, the provincial governments, as well as the state energy organizations.

Major decisions on energy policy and investment are usually reviewed and approved by the Economic Coordination Committee, chaired by the prime minister. Former Prime Minister Nawaz Sharif tried to improve coordination in the sector through an interagency energy group and brought in from abroad a Pakistani with experience working in Western companies as his energy adviser.

Upon his election as prime minister, Khan assumed the position of minister of energy as well as minister of the interior, but in September 2018 he appointed Omar Ayab Khan, also from the PTI party, as minister of energy. The prime minister also created the Task Force on Energy Reform, which is headed by his energy adviser, Naseem Babar.

2. Increasing affordability and access

As a largely rural country, Pakistan faces major challenges in providing affordable and reliable electricity to its population. As mentioned above, 58 million people lack access to electricity, and the challenge is particularly acute in rural areas, where only 54 percent have access.

Pakistan’s progress in expanding access has been slower compared to some other countries. For example, nearby Bangladesh boosted its access level to 88 percent in 2017 from 55 percent in 2010, and more recent estimates are as high as 95 percent.

Pakistan aspires to achieve universal electricity access by 2030 and priority towns in each province have been identified. Pakistan’s rural electrification programs are heavily focused on grid expansion by the various regional distribution companies, many of which are constrained in their ability to finance grid expansion, especially in the remote and sparsely populated areas of Baluchistan and tribal areas.

Decentralized renewable systems are beginning to be introduced, but not at the same scale as in Bangladesh, where several dozen non-governmental organizations (NGOs) and private companies are marketing these systems for household and village applications

3. Meeting growing energy demand and moving to a cleaner energy mix

Pakistan’s economy over the past five years has been growing at more than 4 percent and reached 5.2 percent in 2018. Although primary energy consumption in 2018 grew by 5 percent, primary energy growth has historically lagged behind economic growth.

Between 2007 and 2017, the average rate of primary energy growth was 2.7 percent, compared with a 3.8 percent average annual increase in GDP.

Pakistan depends principally on oil and gas for over 70 percent of its primary energy and has become increasingly dependent on oil and gas imports. Although Pakistan has some domestic crude oil production (about 90 thousand barrels per day in 2018), this only accounts for 18 percent of total oil consumption.

The growing oil-import bill puts great pressure on budgets and reserves. The International Monetary Fund (IMF) estimates Pakistan’s 2017-18 oil imports at US$14.6 billion, or about a quarter of total estimated current account imports, and 2019-20 imports are expected to be at least US$17 billion.

The depreciation of the Pakistan rupee in 2018 added an additional burden to the import bill. Pakistan has had to turn to gas imports as domestic gas consumption has grown (by 7 percent in 2018) and outpaced domestic production. Pakistan’s indigenous gas production has stagnated at about 34 billion cubic meters (bcm) in 2018, accounting for 80 percent of domestic consumption.

Expansion of electricity generation to meet rising demand and reduce the endemic power blackouts and outages has been a high priority of the Pakistan government.

Installed generation capacity has greatly expanded from 23,337 megawatts (MW) in 2014 to 33,836 MW in February 2019, and electricity generation increased by 11 percent from 2017 to 2018. Pakistan continues to have a gap, however, of several thousand megawatts in the non-summer months when hydropower output is lower and electricity demand is high

Although natural gas-fired generation provides the largest share of electricity output, Pakistan has significant hydropower production, some nuclear power, and increasing renewable energy generation.

4. Tackling environmental degradation and climate change

Pakistan and the South Asia region as a whole face enormous environmental challenges due to the geographical and ecological situation, population growth, and urban pressures. Pakistan’s population is expected to grow to 309 million by 2050. As a result, water and energy will become critical to its survival.

Key to Pakistan’s future is the Indus River basin and system, both for irrigation and as a water supply for major urban centers in the east and south. The basin is subject to regular flooding and cyclones. In 2010, Pakistan suffered especially severe flooding that seriously damaged the electricity system and caused an estimated US$25.3 billion in costs, or 5.4 percent of GDP.

The Global Climate Risk Index ranks Pakistan as the seventh most affected country during the period 1997-2016, with 141 severe climate events incurring estimated losses of US$3.8 billion. In Pakistan, these events have included droughts and heat waves (e.g., 1998-02 and 2014-17) and glacial-lake outburst floods in the northern mountains.

Pakistan’s initial submission in the run-up to the Paris Climate Summit, the Intended Nationally Determined Contribution (INDC), presents a useful summary of the threats that Pakistan is facing from climate change:

Many sectors, activities, and target groups are vulnerable to the threats of climate change in Pakistan. These among others include: increased variability of monsoon; rapid recessions of glaciers of Hindu Kush-Karakoram in the Himalayas; threatening water flows in the Indus River System; increased siltation of downstream water reservoirs; increased risk of floods and droughts; heat-stressed conditions in arid and semi-arid regions leading to reduced agriculture productivity; intrusion of saline water in the Indus delta affecting coastal ecology and fishery production, and increased cyclonic activity in the coastal belt due to high sea surface temperatures.

While these climate impacts have taken their toll, Pakistan emits quite small amounts of CO2, i.e., only about 0.6 percent of global energy CO2 emissions. Pakistan’s INDC reports energy emissions in 2015 of 185.97 metric tons (MT) out of total emissions of 405 MT. BP estimates that Pakistan’s energy CO2 emissions rose in 2018 to 195.7 MT, a 3.8 percent increase over 2017.

Overall, energy-related CO2 emissions are projected to increase to 898 MT in 2030. Pakistan’s conditional commitment at Paris was, however, to reduce overall emissions by 20 percent from the projected 2030 levels if an estimated investment of $40 billion were forthcoming for abatement actions in energy, industry, and agriculture.

5. Achieving power-sector financial viability

The establishment of a financially sound power sector in low-income developing countries is a common problem, and Pakistan is continuing to struggle to reduce losses, improve collections, and rationalize tariffs. The power crisis in Pakistan has received much attention including front-page stories in major Western papers.

The shortage of power supplies coupled with a large deficit in collections and pervasive circular debt has represented a persistent political problem stemming back to well before the Sharif and Khan governments. At the root of the problem is both highly technical and commercial losses and especially nonpayment by the government and its state companies.

The issue of losses and inadequate collections is problematic in most of Pakistan’s ten electricity distribution companies, which had average losses of 17.95 percent in 2016-17, with three reporting losses of over 30 percent.

Although estimates vary, the cumulative debts of the power system, including the shifting circular debt among state gas companies, power distribution companies, independent power producers, consumers, and the government’s Central Purchasing Agency, have continued to build up over the years and were estimated to have reached a cumulative level of 1.55 trillion Pakistan rupees (abbreviated as Rs and the amount equivalent to US$11.7 billion) as of June 2018, with the average tariff of Rs11.70/kilowatt hour (kWh), well below the determined power supply cost for 2018-19 of Rs15.53/kWh.

Although the early 2019 level was widely reported at Rs1.4 trillion, one independent analysis places the “official-designed” circular debt at Rs829 billion as of July 2019, not including loans of the Syndicated Term Finance Facility, which if added would total about Rs1.8 trillion.

The government, with donor support, has sought to reduce payment arears and has tried to cap the overall level of circular debt. As much as Rs600 billion of this debt has been parked in a state holding company, the Power Holding Private Ltd. (PHPL).

Private power producers, through the Independent Power Producers Advisory Council (IPPAC), have disputed the effectiveness of government efforts, highlighting a rising circular debt, claiming that their share was Rs254 billion in 2017.

These independent power producers have long-term power-purchase agreements with government entities that have been criticized as too costly with their “take or pay” arrangements and, for renewables, high feed-in tariffs, which are designed to promote installation of renewable electricity technologies. In 2017, the government decided to move generally to shorter-term competitively bid tenders (i.e., terms of fifteen years instead of twenty-five to thirty years) and “take and pay” formulas.

The World Bank and the IMF have reported lower estimated levels of circular debt: the World Bank estimated Rs420 billion, or US$4 billion, by the end of fiscal year (FY)16, or 1 percent of GDP; and the IMF, Rs514 billion at the end of 2017. What seems to have occurred is that the government reduced the budgeted power subsidy (from Rs349 billion in 2012-13 to Rs118 in 2016-17), and this contributed to a buildup of circular debt.

Besides low tariffs, a major contributing factor to circular debt is the large transmission and distribution (T&D) losses. The target for T&D losses for FY2016-17 was 15.3 percent, while the reported losses in distribution alone were almost 18 percent, as indicated above.

If transmission losses are included, the total difference between electricity generated by the producers and electricity sold by the regional distribution companies (DISCOs) amounted to 21.6 percent of generation in FY2016-17. Arrears in the gas sector also have been rising (to a reported US$1 billion for Sui Northern and Sui Southern gas companies), and the government increased gas prices by 200 percent on July 1, 2019.

In summary, the overall cost to Pakistan of the power sector’s poor economic and financial performance is large. A World Bank report estimates that the total economic cost of power-sector distortions in Pakistan was US$17.7 billion in FY15, or about 6.5 percent of GDP stemming from the negative impacts (US$12.9 billion a year) of unreliable electricity to firms and households.

Why Should You Invest in The Energy Sector

There are many reasons to invest in energy and all its related sectors and companies. Energy is always in demand; its use is expected to grow; and investing in energy gives you opportunities to shape the future while earning income. But what, specifically, makes energy a fertile market for investment? The following information will give you some insight.

Future growth

According to the International Energy Agency, global energy demand will grow by more than 30% by 2035. China, India, and the Middle East will account for two-thirds of that growth. By then, global oil demand will be around 100 million barrels per day (mb/d) — up from 89 mb/d in 2012 — as the number of cars on the road will double to 1.7 billion.

What’s more, oil prices are expected to rise to $125 per barrel by then. Demand for electricity is forecast to grow twice as fast as total energy consumption, leading prices to rise 15% by 2035.

The size of the energy market

Valued at around $7 trillion globally, energy is the most valuable market segment on earth. Delivery of usable forms of energy to the world’s seven billion people is responsible for 10% of the world’s annual gross domestic product.

A look at the ten worldwide companies that earn the highest annual revenue reveals that nine out of ten of them operate in the energy industry. That’s because energy is so pervasive. It’s required for every human endeavor. Because energy generates more revenue than any other industry, it is a prime place to stash your investment dollars.

Projected investment

To meet rising energy demands, the world must invest $37 trillion in related production and supply infrastructure across all sectors of the energy industry over the next two decades. Over half of that total — $19 trillion — will be required by the oil and gas sector for exploration, transportation, and production increases. The remainder will go toward the electricity sector, with $17 trillion slated to be invested in upgraded natural gas and renewable generation, and an upgraded transmission and distribution network that maximizes efficiency.

Recent returns

As a result of constantly rising demand and prices, energy investments have returned above-average results for decades. For example, look at ExxonMobil (NYSE: XOM): Between 2003 and 2013, Exxon returned 140% compared to the Dow Jones’ 40%. The same holds true between 1993 and 2013, with Exxon delivering 472% and the Dow returning 324%.

And it’s not just Exxon. Over the last 15 years, The Energy Select SPDR ETF (NYSE: XLE), which holds a broad ranges of energy companies, outpaced the Dow Jones Industrial average by over 220%.

Diversity

What do you think of when energy is mentioned? Oil perhaps? Electricity? Solar power? Wind? The fact is the energy market is so big that it encompasses a diverse array of market sectors. Oil, gas, coal, and nuclear energy only scratch the surface of the industry’s offerings.

Biofuels require input crops, so energy investing is also agriculture investing. Most electricity plants, no matter the energy source, need water to be cooled, so energy investing is also water investing. And in the case of solar and other clean technologies, investments and revenue more resemble the semiconductor market, so energy investing is also technology investing.

Income and growth

Aside from diversified companies, energy investing allows you to pursue various investment goals. You also have blue chip value plays, growth companies, income opportunities, and the chance to hit it big with start-ups and exploration companies.

You’ll need to determine the strategy that is most appropriate for your economic situation. But once you do, energy investing can help you accomplish it. Integrated oil and gas companies provide value and dividends, pipeline operators and master limited partnerships offer steady income payments, and immature oil and gas explorers can deliver hefty returns to the investor willing to take on a bit more risk.

Insight

Somewhere someone is always asking why gas prices are increasing. You never have to be that person if you invest in energy and follow it closely. You’ll know that gas prices are about to tick up a few pennies when you see crude oil futures head higher. Or you’ll know that when refiners switch off their summer blend, gas will be a bit cheaper in the fall.

When you’re invested in something, you take notice and pay attention to what affects it. With energy, you’ll know how the market is impacting your day-to-day life.

Conscience

If you invest your money using a certain set of principles, energy investing can be a great tool. In the era of global warming and climate change, many individuals are seeking out investments that are good for their portfolios as well as the planet.

In energy, you can do that by investing in companies that promote energy efficiency or produce electricity with few emissions. There are smart grid companies; solar, wind, and biofuel companies; and funds that specialize in each.

DIY

With the advent of exchange-traded funds (ETFs), many investment strategies are now available to the retail investor. The ability to buy an entire sector with one fund, profit from commodity prices, and employ leverage and shorting can be effectively accomplished with ETFs in the energy sector.

You can buy a coal ETF, for example, to gain broad exposure to the global coal market without betting on one company. Or you can buy a leveraged fund that returns two or three times the daily price of a specific commodity.

Everything requires energy

Try flying a plane without energy. Or building a car. Or turning on the lights and computers at a bank. Hardly anything we do can be done without exerting energy. It’s a requirement. So unlike some sectors that are dependent on consumer discretionary spending or others that have short-lived trends, energy is in constant demand. And while it’s not entirely immune to swings and recessions, energy is certainly a safe and stable place to invest.

What is The Best Energy Company to Invest in?

Energy stocks took a beating this spring, but many rebounded from their lows. Several energy stocks are good additions since they remain undervalued but have low debt levels and a higher amount of free cash flow. As the economy reopened, consumption of gasoline and other crude oil products rose and crude oil prices followed suit.

Lower crude oil prices are likely to stay for the rest of 2020, but volatility has diminished. The market has returned to something resembling “normal,” but the market remains in oversupply that is exacerbated by a sluggish economy, says Charles Sizemore, chief investment officer of Sizemore Capital Management in Dallas.

Energy stocks as a group are cheap and priced to outperform in an otherwise expensive market. “But this is still a sector in decline with a murky future,” Sizemore says. “It looks a little like Big Tobacco 20 or 30 years ago.”

1. Chevron Corp.

Unlike other major oil producers, Chevron has maintained its generous dividend yield of 6.1%. The oil behemoth acquired Noble Energy, another oil producer, for a $5 billion all-stock deal in July. Chevron faced a rough second quarter with an adjusted loss of $3 billion on revenue of $13.5 billion because it was forced to write down 100% of its $2.6 billion stake in its Venezuela business.

The low price of crude oil resulted in another $1.8 billion in charges since oil was trading at a low of $19 a barrel. During the first quarter, Chevron had announced it was cutting capital expenditures to $14 billion and lowering operating expenses by another $1 billion.

2. Exxon Mobil Corp.

Oil behemoth Exxon Mobil still has a strong balance sheet. Exxon provides a dividend yield of 8.3% and declared a cash dividend of 87 cents for the third quarter, same as the dividend in the second quarter of 2020.

The company reported second-quarter revenue of $32.6 billion as production declined by 10%. \Exxon, the largest U.S. oil company, slashed $10 billion from its planned capital expenditures in 2020 in the first quarter, and CEO Darren Woods said in a statement that it plans to “meet or exceed” cost-reduction targets for 2020.

The hurdles to oil prices are a lack of demand and the “extreme oversupply” from years of over-investment, says Patrick Morris, executive vice president and director of Unicorn REH, a Dallas-based exploration and production company. “I think oil prices are $40-$50 a barrel and range-bound.”

3. Kinder Morgan (KMI)

Houston-based pipeline operator Kinder Morgan reported a loss of $637 million in the second quarter as revenue dropped by 20% to nearly $2.6 billion and because of a write-down of $1 billion worth of pipelines. The company would have generated a $363 million profit without the write-down.

The company still generates a generous dividend of 7.4% and is the top stock choice for Morris. Kinder Morgan has relatively low debt metrics for the midstream sector and “should be able to manage both its capex needs as well as its dividend from organic cash flow,” says Stewart Glickman, senior equity analyst at CFRA Research in New York, which has a “buy” rating for KMI.

4. Williams Cos. (WMB)

Williams, a natural gas-focused operator of pipelines and other midstream assets, announced a second-quarter dividend of 40 cents per share, which is a 5.3% increase from its third-quarter 2019 dividend of 38 cents.

The company has paid a common stock dividend every quarter since 1974 and provides a generous dividend yield of 8.1%. Electricity demand is anticipated to fall less compared with the transportation sector due to the pandemic, says Rob Thummel, a portfolio manager at Tortoise Capital in Kansas.

Natural gas has emerged as the main fuel to generate electricity in the U.S. Williams reported a second-quarter net income of $303 million and anticipates adjusted EBITDA toward the lower end of between $4.95 billion and $5.25 billion. The company says 2020 growth capital expenditure is estimated at $1 billion to $1.2 billion, down from the original range of $1.1 billion to $1.3 billion.

5. Cheniere Energy (LNG)

Cheniere Energy is a pure play operator of facilities that liquefy U.S.-produced natural gas so it can be loaded onto ships and transported globally. It has been proven in the U.S. that replacing coal with natural gas and renewables will reduce carbon emissions, Thummel says.

Many countries will need to import liquefied natural gas from the U.S. and elsewhere to reduce emissions. Cheniere is poised to grow alongside the rise in global demand for natural gas, he says. “The coronavirus will not stop the global energy evolution,” Thummel says. “As part of energy evolution, the world needs more energy and less carbon emissions. Other large energy consumers such as China and India need to take similar actions of reducing coal with natural gas and renewables to improve the environment.”

6. Magellan Midstream Partners (MMP)

Magellan Midstream Partners, a refined products and pipeline operator, reported second-quarter net income of $133.8 million, compared with $253.7 million for the second quarter of 2019 due to reduced demand from lower crude oil prices and travel and economic restrictions from the pandemic.

“Your safest bet in the energy space is midstream and particularly the more conservative names like Enterprise Products and Magellan Midstream, both of which yield about 10% at current prices,” Sizemore says. “Both have very solid balance sheets and low leverage.”

Magellan’s essential infrastructure assets are connected to many key U.S. refineries. Investors could take advantage of Magellan’s “resilient business model, and its debt metrics are amongst the best of its peers,” Thummel says.

7. Enterprise Products Partners (EPD)

Enterprise Products Partners, a diversified energy infrastructure operator, has an excellent management team, Thummel says. The company reported a $1 billion profit in the second quarter even though revenue dropped by 31% to $5.8 billion.

Enterprise increased its cash payment to investors annually for the last 15 years and owns some of the most essential energy infrastructure assets in the U.S. The company’s current yield is more than 10%, and its debt-to-EBITDA metric is on the low end relative to its peers.

EPD and Magellan Midstream both have solid balance sheets and low leverage, but even in the midstream sector, there are risks today that would have been unthinkable a few years ago, Sizemore says. “As overleveraged producers are forced into bankruptcy, the contracts responsible for paying the midstream operators are at risk of being renegotiated in some cases. At current prices, the best-in-class pipeline operators are hard to ignore.”

8. Phillips 66 (PSX)

Phillips 66, a downstream company with midstream assets, reported a second-quarter loss of $141 million, compared with a loss of $2.5 billion in the first quarter of 2020. Phillips 66 had cash and cash equivalents of $1.9 billion, and consolidated debt was $14.4 billion.

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In April, the company increased the size of its 364-day term loan facility to $2 billion, with $1 billion of capacity remaining undrawn as of June 30. The company also issued $1 billion of senior unsecured notes in April and an additional $1 billion of senior unsecured notes in June. The company has a “buy” rating from CFRA’s Glickman and yields 5.9%.

9. NuStar Energy (NS)

NuStar Energy, a San Antonio-based master limited partnership, owns and operates 10,000 miles of pipeline and 75 terminal and storage facilities that store and distribute crude oil, refined products and specialty liquids. The company’s operations are largely in the middle of the country, “where demand destruction was likely more muted,” Glickman wrote in a research report.

The company’s 75 million barrels of crude oil storage in the U.S. will remain well-used by customers for the foreseeable future. NuStar declared a second-quarter 2020 common unit distribution of 40 cents per unit. The company’s “risk-reward profile is now attractive despite severe macro headwinds,” he wrote.

10. EOG Resources (EOG)

EOG Resources, a Houston-based oil and gas company, has a strong balance sheet with a net debt-to-capital ratio of 10%, which is superior to Exxon Mobil and Chevron, according to Glickman’s report. The dividend yields more than 3%, and “although the payout ratios look very stretched, we still think EOG will defend the dividend, as have XOM and CVX,” he wrote.

EOG Resources still has a “plethora of well locations” despite shutting in crude oil production. The company’s total debt outstanding was $5.2 billion for a debt-to-total-capitalization ratio of 20% as of March 31.

Based on the $2.9 billion of cash on the balance sheet at the end of the first quarter, EOG’s net debt was $2.3 billion for a net debt-to-total-capitalization ratio of 10%. EOG’s liquidity includes a $2 billion senior unsecured revolving credit agreement as of March 31.

Finally

How investors choose to invest in the energy sector in Pakistan and other parts of the world will likely depend on their preferences and specific views about the growth and earnings prospects of the various companies. The energy industry is more extensive and diversified than merely the oil and gas industry.

Many investors believe renewable and alternative energy sources will play an important role in the future, especially as the demand for electric cars continues to grow.