ISLAMABAD: The government has made it mandatory for Pakistan Petroleum Limited (PPL) to seek appraisal of success potential of Block-8, Iraq, through third party validation to get balance financial amount of $22.4 million out of the approved $100 million for exploratory work.
Well-informed sources told Business Recorder that Petroleum Division presented its case before a high-level meeting presided over by Finance Minister Shaukat Tarin to re-validate the balance financial amount of $22.4 million out of the original Economic coordination Committee (ECC) approval of $100 million, to enable PPL/PPL Asia to meet committed exploratory work programme in Block-8, Iraq, during the extension period.
The sources said PPL had confirmed availability of sufficient internal resources. It was informed that although no interim budgetary allocation was being sought, however, if PPL was to continue operations in Block-8 Iraq beyond the exploration period (contingent upon success in their current exploratory efforts), the Company would need to commit more investment. Therefore, Petroleum Division will seek fresh approval as it would be a new phase in E&P activity.
During the ensuing discussion, the Finance Minister observed that although no additional budgetary allocation was requested, precious foreign exchange of $ 22.4 million i.e. balance amount, was involved in the proposal.
There was evidence that earlier investment of $ 77.6 million made by PPL in this exploration project was going to be successful. Therefore, there must be some technical evaluation by a third party of repute in the relevant field to assess success potential of the project before spending further amount.
A side issue regarding the security of petroleum exploration sites was also discussed by the forum. SAPM on Power and Petroleum Tabish Gauhar emphasized enhanced security on the pattern of China Pakistan Economic Corridor (CPEC).
The Minister for Interior, Sheikh Rashid Ahmed, argued that sufficient security personnel were available under the umbrella of Civil Armed Forces who could be used for the purpose instead of raising a new security force. The idea was appreciated by the participants of the meeting.
The Finance Minister observed that Ministry of Interior may formulate a policy in this regard in consultation with the Petroleum Division.
After a detailed discussion, the meeting agreed to allow the balance financial amount of $ 22.4 million subject to the condition that the PPL Board ensures technical appraisal of the success potential of Block-8, Iraq to be carried out through a third party of repute in the relevant technology/field.
Copyright Business Recorder, 2021