FRIDAY MARCH 11: OGDCL may lose Jakhro field

ISLAMABAD: The Oil and Gas Development Company Limited (OGDCL) is expected to lose Jakhro field with oil and gas reserves worth millions of dollars as the Sindh government is reportedly making a bid for the field declared dormant by OGDCL. Sources told Business Recorder that the Sindh government has demanded that it be granted the lease for Jakhro field after OGDCL lease for the field expires. Jakhro field was termed by OGDCL management as dormant.
The OGDCL management had scrapped the tender for which bidding was scheduled in September last year. Jakhro field is estimated to produce 500 barrels per day, 10 million cubic feet gas per day (mmcfd) and 21 tons of LPG per day. Singh government is currently negotiating Gas Sales Agreement (GSA) with the OGDCL management over dormant fields.
The Economic Co-ordination Committee (ECC) in its meeting in the last week of January 2011 had decided that gas from Nur, Bagla, Jakhro and Sara West fields would be allocated to Sindh government, or its designated entity, subject to the following conditions that: (i) OGDCL will be paid according to petroleum concession agreement; (ii) policy price for gas as well as products ie LPG and condensate be effective; (iii) product disposal by the buyer, in accordance with the prevalent rules and regulation; and (iv) all applicable taxes.
Petroleum Ministry official said that lease of Jakhro field was granted to OGDCL in 2002 that expired in 2007 on account of non-commercial production as per rule 43 of Petroleum and Exploration Rules. The OGDCL management had applied to the Director General (DG) Petroleum Concession for extension in lease of Jhakhro field. "There is no rule to re-grant extension in lease," sources said, adding that in such situation, OGDCL loses the right over the field and Sindh government gets the lease. Spokesman for OGDCL, Basharat Mirza said that the OGDCL management had applied for extension in lease after it expired and the DG PC has so far not granted the extension.
Sources accused a certain group of officials in OGDCL of hatching a conspiracy backed by certain investors interested in the field for LPG production. Jakhro field is 15 kilometers away from Sanjoro field and therefore the two fields could be linked. "But the certain group in OGDCL backed by some LPG groups had labelled the field dormant to benefit some groups," sources maintained.
OGDCL had scrapped the tender for sale of hydrocarbon resources at wellhead Jakhro condensate gas last year after Sindh government had written to OGDCL that it had the right to operate the field after the 18th Amendment. OGDCL had declared Jakhro field as dormant and advertised bids on July 11, 2010 for the first time. The OGDCL management advertised extension on August 28, 2010 after revision in wellhead gas sale formula and extended the date of opening bids till September 30, 2010 which was later cancelled.