Minister for Petroleum and Natural Re-sources Shahid Khaqan Abbasi said on Tues-day that Petroleum Ministry has issued notices to 26 E&P companies; out of which 11 licences have been cancelled. Addressing a press conference, the Petroleum Minister defended the federal government against the accusations of PTI Chairman Imran Khan in which the latter criticised the federal government for allegedly not issuing No Objection Certificate (NoC) to M/s Hycarbex-American Energy Inc.
"Imran Khan has made irresponsible accusations which have no relevance to ground realities but perhaps he doesn''t understand the issue," Abbasi said. Giving the background of the issue the Petroleum Minister stated that an exploration licence was granted on June 4, 2010 for Peshawar Block, (located in Districts Peshawar, Orakzai, Nowshere, Kohat, Hangu and Khyber Agency under Pakistan Petroleum ( Exploration and Production) Rules, 2009 and Petroleum Policy, 2009) to M/s Hycarbex-Amerixan Inc for an initial period of three years to discharge the following committed work programme as per the bid submitted by the Company: (i) 1st year- 150 km 2D seismic data acquisition, processing and interpretation with minimum financial obligations of $0.45 million( work unit 45); (ii) 2nd year- 150 km 2D seismic data acquisition, processing and interpretation with a financial cost of $0.45 million( 45 work units); and (iii) 3rd year- one well upto 3000 meters depth with financial cost of $4 million( 400 work units) and one well upto 1000 meters depth with financial cost of $1 million( 100 work units), totalling it to financial cost of $5.90 million( 590 work units).
In reply to a question, Abbasi said that Imram Khan claimed that an investment of Rs 100 billion is halted due to non issuance of NOC but in fact the total investment of American company was $5.9 million. Ahahid Khaqan Abbassi accused Imran Khan of continuing to make unfounded accusations similar to those he made during his dharna. Article 3.2(b) of Peshawar Block Petroleum Concession Agreement (PCA) states that "operator shall commence joint operations within 90 days after the effective date" which was June 4, 2010; M/s Hycarbex-American Energy Inc did not initiate the work even after lapse of more than five years time. They also did not pay Rs 81 million due financial obligations for training, area rental and social welfare etc.
The Minister was of the view that since the company had not discharged even a single work unit and they had requested an extension in the exploration licence without any cogent reason, 60 days notice was issued to the company on September 18, 2015. In the meantime, the management of the company changed pursuant to finalisation of the award of arbitration proceedings outside Pakistan. Keeping in view the arbitration, Ministry of Petroleum and Natural Resources is considering the company''s request for extension of the exploration licence to fulfil their contractual obligations as the new management has taken over the company.
Abbasi said the company''s representative was called by the Ministry of Petroleum at the DG PC office to discuss the issue reported in a section of the press on February 22, 2016. The company''s representative revealed that they were called by KPODGCL for a meeting a few days back to discuss their activities including opening of bank accounts for payment of financial obligations. The company has categorically stated that they have no complaints against the Ministry of Petroleum as no NoC is required or pending with the federal government.
"It is evident from the record that the company has not yet discharged its obligations and as far as the Petroleum Ministry is concerned, there is no restriction on the company to invest in the Peshawar Block and fulfil its contractual obligations," Abbasi maintained.
According to the Minister, since its establishment, the federal government has asked the KPOGDCL to operate on the pattern of federal OGDCL. "We have asked them to get blocks on lease and do exploration like other companies are doing with the assurance that there will be no barriers. They have not started exploration activity so far," claimed the Minister.
Presently, 396 million cubic feet (mmcfd) and around 46000 barrel oil is being extracted from KPK with the efforts of federal government not the provincial government as all the production is being taken out from the blocks allocated by the DGPC. When asked whether KPOGDCL had requested the federal government to provide 6 platoons of FC which were not provided, the Minister stated that federal government provides security to each company but it is provided after completion of the process.
Minister stated that Razi-ud-Din the head of KPOGDCL off and on visits the Ministry to attend meetings but he never raised this issue with the Ministry. Replying to a question about recent permission to utilise 5000 litres of seepage surface oil despite the fact that the demand of KP was 40,000 litres seepage surface oil the Minister said "we allow 40,000 to KPOGCL as and when they send a request". The Minister argued all the requests of KP are entertained immediately and "if they have any complaint they come and place it on the table."
Answering a question regarding cooperation from the KP government to curb gas theft, Minister said that Chief Minister has written a letter that he cannot do anything about theft of Rs 6-8 billion. "Theft is everywhere in Pakistan but is more blatant in KP and under the supervision of provincial government. We disconnected the gas but the DCO and DPO helped restore connections. In KP entire villages involved in gas theft," he continued.
Abbasi said that the Petroleum Ministry will take up this issue at the Council of Common Interests (CCI). The Minister further stated that in KP generation licence was issued to a power company 6-8 years ago and gas was placed at the disposal of PPIB. The company came to Petroleum Ministry for gas allocation but KP government approached the Ministry and demanded that gas may be given to provincial government which is unutilised for more than one and a half years. Recently, Petroleum Ministry submitted a summary to the ECC suggesting that gas may be allocated to the KP government. Natural gas is available in KP which the provincial government can take but the latter should keep in mind that according to the Constitution federal government''s share is 65 percent.
He said, the issue of gas distribution will be raised in the CCI meeting but it should be discussed at the larger forum like Senate to resolve the issue. The Petroleum Minister questioned the expertise of Asad Umar saying he doesn''t come across as an expert.
Answering a question regarding the recent LNG deal with Qatar, the Petroleum Minister stated that India negotiated LNG deal during the same week when Pakistan did. India''s contract was 8.5 million tons and Pakistan negotiated a deal of 3.75 million tons of which during the first two years, Pakistan will purchase 2.2 million tons. Pakistan''s price is less than India''s. Reports, however, suggest that India finalised deal with Qatar at 12.05 percent of Brent whereas Pakistan inked agreement at 13.37 percent of Brent.
In reply to a question he said that price of petrol in Pakistan is the lowest in the region. He further stated that the federal government has offered Sindh to get LNG or wait for additional gas in the system after which a reduction in load shedding will be shared with the province.
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