Government asked to put Ogra under Petroleum Ministry

The National Assembly Standing Committee on Petroleum and Natural Resources has directed the government to put the Oil and Gas Regulatory Authority (Ogra) under the control of the Ministry of Petroleum. MNA Talib Nakai, Chairman of the standing committee, directed this while chairing the committee meeting to discuss the current oil and gas exploration activities in the country.
The meeting was also attended by Dr Asim Hussain, Minister for Petroleum and Natural Resources, Committee Member, Muhammad Ijaz Chaudhary Secretary Petroleum Ministry, Bisharat Mizra Managing Director Oil and Gas Development Company (OGDC) along with other high-ups of the ministry.
Briefing the committee on current oil and gas demand and supply situation in the country the minister said that depreciation of rupee against dollar would have serious implications for economy, because it would increase local petrol prices, which would lead to enhance Pakistan's import bill.
He said that the government has limited options to deal with the energy crisis; among them suspension of three-day gas to industry, gas load-management plan of two days in Sindh and two and a half day in Punjab for CNG sector. Regarding increase in gas load shedding duration for CNG sector, he said that further load shedding for the sector is not possible as it would not be beneficial, as with expected increase in petrol prices more people would start using CNG in the upcoming winter.
He added that parity between CNG and petrol price at present is 55 percent, and the government has no plan to increase this parity in the large interest of the common man. The minister said that his ministry also considers bringing Ogra under its control and request would soon be sent to the cabinet in this connection. The minister added that summary would be moved to cabinet for the approval of gas surcharge.
About the new LPG policy, he said that under the head of PL annually Rs 5-6 billion revenue would be collected from LPG, which would be utilised on construction of LNG pipeline from Karachi to Lahore so as to end gas load shedding in Punjab. "Ogra has opened a new bank account for the collection of PL on LPG and all the marketing companies are bound to submit PL there," the minister said.
He said at present only 20 out 89 LPG marketing companies are active in the business and these quota holders are collusive, while the new LPG policy is aiming at providing competitive market environment to all marketing companies. Most of the active LPG companies are owned by influential people and quotas were allocated during Pervez Musharraf's regime, who used LPG quotas as a tool to appease politicians and other influential personalities.
The committee was briefed by the Oil and Gas Development Company (OGDC) about the on-going exploration activities and potential oil and gas reservoirs in the country. OGDC officials told the committee at present Pakistan has potential gas reservoirs of 26.62 trillion cft and last year 134 gas exploration licences were issued. The committee was informed that 278,575 square km area was under exploration, of which 61,084 or 22 percent square km was being explored by OGDC, and rest of exploration was being done by others.
At present Pakistan's total oil production is 65,000 barrels per day, which is only 15 percent of local requirement. Of this 37,023 is produced by OGDC and 27,962 by other companies, it was further informed. Country's total gas production stands at 4,059 million cubic feet per day (MMCFD), of which 901 MMCFD is being produced by OGDC and 3,158 MMCFD by other companies.
OGDC is the largest upstream company in the Country. "We enjoy the largest share of exploration acreage in the country, which is 22 percent of total awarded acreage. As of December 2010, it holds 48 percent of the country's recoverable oil reserves, and 37 percent of the country's recoverable gas reserves. In terms of production, currently OGDC delivers 56 percent of Pakistan's oil output, and 22 percent of gas production. OGDC's remaining recoverable reserves estimated as of June 2011 stood at an impressive 932 MMboe. The reserves data is based on latest third-party certified reserves (DeGolyer & MacNaughton) as of December 31 2006, minus the actual net production from January 2007 to June 2011, and some other in house adjustments.
"OGDC has a portfolio of 77 fields, out of which 45 fields are 100 percent owned and operated, and 32 are non-operated fields. We carry out our operations in some of our producing properties with partnerships with other E&P companies operating in Pakistan, which includes both foreign and local E&P companies. We have vast experience in operating in all the four provinces of the country, and over the years have acquired an unmatched advantage over our competitors with respect to expertise that our company has in exploration as well as production activities."