Kirthar exploration licence: ECC approves grant of second two-year renewal

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has approved the grant of second two years’ renewal over Kirthar Exploration License Block after it was told that the government is taking various measures to reduce the challenge of the widening gap between energy supply-demand.

The ECC was informed that Pakistan is currently facing a serious challenge of the widening gap in energy supply-demand which is mainly attributed to the natural depletion of major oil/gas fields and the increase in demand and dearth of new big discoveries. To reduce this gap, the government is taking various measures. One such step pertains to the renewal of the exploration license to enable the company to perform exploration activities in the license area. The provision of renewal of license has been incorporated in the rules and policies announced from time to time.

The meeting was further informed that Directorate General Petroleum Concessions has received a request from M/s Polish Oil and Gas Company Limited (POGC) for entry into 2nd two-year renewal of Kirthar Exploration License (EL) and exemption from the condition of Rule 21(4)c of Pakistan Petroleum (Exploration and Production) Rules, 2001, to relinquish 10 per cent of the License area at the end of first Renewal. Kirthar EL is governed by Pakistan Petroleum (E & P) Rules, 2001. In the rules, the discretionary power for grant of renewal lies with the Government. The relevant renewal Rule 21(2) of Pakistan Petroleum Rules, 2001 stated that the government may, subject to the terms of the licence, grant up to two renewals.

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The term of each renewal shall be up to two years. However, to avail the renewal of maximum term of two years a reasonable work program comprising at least an exploration well shall have to be offered keeping in view the surface and geological conditions of the licence area.

A holder desiring to obtain such renewal shall make an application at least three months before the expiry of the licence or such lesser period as the DGPC may allow the company has also requested for exemption from the condition of Rule 21(4) c to relinquish 10 per cent of the license area at the end of first renewal, because the company wants to further explore the area for potential prospects.

The government in accordance the regulation of mines and oil fields and mineral development may exempt the company from the applicability of Rule 21(4)c. The case has been reviewed thoroughly taking into consideration the geological complexities of the license area, associated exploratory and operational risks, the significance of the geological and geophysical activities, the security situation of the area, and payment of all government dues and guarantees.

The Petroleum Division proposed to approve the request of the company for entry in to 2nd two years renewal of Kirthar EL, wef, 28-08-2022 in accordance with rule of Pakistan Petroleum (E&P) Rules, 2001, and grant exemption from the condition of Rule 21(4) c of the Rules 2001 to relinquish 10 per cent of the license area at the end of In Renewal in accordance with Section-5 of the Regulation of Mines and Oil fields and Mineral Development subject to that: M/s POGC will drill an exploratory well up to Pub Formation or till 2500 meters depth, whichever is shallower, during the 2ndRenewal period; the company will discharge/clear all financial obligations like training, social welfare, rental for the extended period and any leftover obligations within a fortnight from the approval.

Copyright Business Recorder, 2023