ISLAMABAD: The Cabinet Committee on Disposal of Legislative Cases (CCLC) has deferred approval of draft Pakistan Offshore Petroleum (Exploration and Production) Rules, 2021 due to provision of incomplete documents, official sources told Business Recorder.
On January 21, 2021, the CCLC was informed that the Pakistan Petroleum (Exploration and Production Policy 2012 was approved by the Council of Common Interests (CCI) in its meeting held on August 8, 2012. The Policy envisages execution of (i) Petroleum Concessions Agreements (PCAs) and grant of Exploration Licences and D&P leases for Onshore areas and (ii) grant of Exploration Licences to Government Holding Private Limited (GHPL) who will contract the applicant company(ies) to perform the required work via a Production Sharing Agreement (PSA).
The CCLC was also informed that to implement the policy for onshore areas, Pakistan Onshore Petroleum Exploration and Production Rules along with model PCA were developed and are being implemented. However, for offshore areas, the desired set of rules and model PSA could not be developed. While remaining within the overall framework enunciated in the approved policy, Petroleum Division has now developed Pakistan Offshore Petroleum (Exploration and Production) Rules 2021 (Draft Offshore Rules, 2021).
The CCLC was further informed that section 2 of the Regulation of Mines and Oilfields and Mineral Development (Government Control) Act, 1948 empowers the Federal Government to make rules to provide for the matters covered in the Act including licencing and leasing for petroleum exploration and production activities and allied matters. As the same time, the Petroleum Division will execute the PSAs with GHPL and contractors on behalf of the Federal Government.
The Committee was apprised that in accordance with the drive towards ease of doing business, the ECC of the Cabinet on November 27, 2019 made various amendments in the Pakistan Petroleum ( Exploration and Production) Rules, 2013( Onshore Rules 2013) that have been incorporated in the Rules notified in the official gazette on January 14, 2020. Since the amendments aimed to create ease of doing business in Onshore Rules, 2013 was made after due consultation with all stakeholders, therefore, no further consultation was considered necessary for incorporating similar dispensations in the draft Onshore Rules, 2020. Likewise, as CCI also approved incorporation of explicit clause for imposition of royalty on LPG at market value in new PCA, a similar insertion being made in the draft PSA.
It was also apprised that the draft rules along with draft Model PSA were circulated to Finance, Planning, Development & Special Initiatives and Law& Justice Divisions, GHPL and PPEPCA for comments which have been received, examined and suitably incorporated in the draft Rules.
Petroleum Division requested that the CCLC approved the draft Pakistan Offshore Petroleum (Exploration and Production) Rules 2021.
The members of the CCLC showed their concern regarding the provision of incomplete copies of the above-mentioned rules. It was stated that they had received copies of proposed complete rules at the start of the meeting and they had not been able to study and frame their point of views about these rules. It was proposed that the consideration of the matter may be deferred till next meeting.
Copyright Business Recorder, 2021