E&P licences revival: Country to receive $5m foreign investment in 3 months
ISLAMABAD: The Cabinet decision to revive 11 revoked licences for enhancing production activities of oil and gas in the country will help receive $5 million foreign investment within the next three months and a total $110 million, it is learnt.
According to documents, the federal cabinet approved the framework for the revival of 11 licences through out-of-court settlement and with the effect to this decision there will be $ 110 million worth of investment in these blocks in total and $5 million in next three months.
Sources said that Foreign Minister Bilawal Bhutto Zardari and Minister for Trade, Syed NaveedQamar have played positive roles for the revival of revoked petroleum exploration licences during recent meeting of the federal cabinet.
Five licences of Dewan, five licence of Pakistan Exploration Limited (PEL), and one licence of Oil and Gas Investment Company were revoked and these E&P companies will be offered gas price in line with the Petroleum Policy, 2012, following signing of supplemental agreements with the government.
The Petroleum Division told the cabinet, in a recent meeting, that the government had granted exclusive petroleum exploration licences for an initial period of five years through a competitive bidding process.
Later, the licences were revoked when the companies failed to undertake the committed work programmes during the stipulated time period and did not meet financial obligations to meet the goals of social welfare, training, rent, and production bonus.
However, the Civil Court of Islamabad and the Sindh High Court passed status quo orders for the 11 exploration blocks.
Cases were being pursued in the courts for early decisions. Litigant companies also approached the government, showing keen interest in exploration work.
A framework for the renewal of revoked licences through an out-of-court settlement was earlier submitted to the Economic Coordination Committee (ECC) of the Cabinet for consideration and approval.
Subsequently, the Cabinet Division told the Petroleum Division to seek fresh approval of the prime minister as minister in charge of the Petroleum Division for submission of a summary to the cabinet.
Later, the framework was submitted to the cabinet for its consideration and approval.
During discussion, a cabinet member, while endorsing the proposal of the Petroleum Division, highlighted that the revival of licences through an out-of-court settlement would give a fresh fillip to the exploration activities, which had been dormant for various reasons.
The cabinet noted general consensus and support for the proposed renewal of exploration licences. It reviewed the summary titled, “Revival of Revoked Petroleum Exploration Licences,” submitted by the Petroleum Division, and approved the proposal.
Copyright Business Recorder, 2022
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