March 25, 2003	Tuesday	Muharram 21, 1424

PESHAWAR, March 24: The NWFP’s proceeds under the head of royalty on crude oil stood at zero level during the first eight months of the current financial year, according to official sources.

“Well over eight months of the financial year 2002-03 have passed and NWFP has yet to receive funds on account of royalty on crude oil,” said a senior government functionary.

The federal government had intimated to release a total of Rs124.748 million on account of royalty on crude oil to NWFP during the financial year 2002-03.

The province is entitled to receive under this head against the production of crude oil from the Shakkar Darra oil and gas field near Kohat.

Before the start of the current financial year, said the sources, the federal government had intimated the then provincial government that NWFP had been estimated to get Rs124.748 million as royalty on crude oil.

“We have yet to open the account after having received nothing under this head,” said a well-placed official of the provincial government.

This would be the second year that NWFP would get royalty on crude oil. During the financial year 2001-02, the province had initially been projected to receive Rs52.314 million. However, the province had ended up with a total of Rs24.6 million — Rs27.6 million less than the NWFP’s initially estimated share.

The sources said though the province did not receive anything, the royalty proceeds were expected to be released by the federal government during the last quarter of the current financial year.

However, official talked to by Dawn appeared least hopeful that the province would receive what it had initially been projected to get during the financial year 2002-03.

“We would get something, but not the entire amount the province had been projected at the start of the current financial year,” said a finance manager of the province.

Similarly, the province had also been projected to get Rs35.196 million as proceeds of royalty on natural gas. The federal government releases funds under this head to provinces in which well-head of natural gas is situated.

The NWFP’s stake under the head of royalty on gas revolves around the significantly large reserves of natural gas found recently in Shakkar Darra, near Kohat, and Gurguray, near Karak, in NWFP recently.

However, the commercial production of gas reserves from either of the gas fields, said the sources, had not yet started. Hence, the province would not be able to get royalty on gas till the time any of the two fields starts commercial production operations.

According to the official sources, the Sui Northern Gas Pipeline Limited (SNGPL) is expecting to augment its gas distribution system by getting commenced gas supplies from the Gurguray gas reserves either by the end of the current year or during the first quarter of the next year.

As far as availability of gas from the Shakkar Darra oil and gas field is concerned, it also remains to be a far probability as the OGDC has not yet laid down transmission line to supply gas to the SNGPL for onward sale of the same, they added.

Financial constraints, said the sources, hampered the OGDC from installing the transmission line. This has not only delayed the utilization of Shakkar Darra’s gas reserves all the more, it also made the NWFP to lose the amount it could have got on account of royalty on crude oil.

The NWFP’s receipts under this head remained zero during the financial year 2001-02 after it received nothing against its estimated share of Rs11.6 million for the same financial year.

“This year, too, the province is likely to end up with zero receipts under the head of royalty on gas as gas supply from the two fields has not yet commenced,” said the sources.