HYDERABAD, Nov 29: The government has failed completely to ensure that the oil and gas companies spend in the areas where they operate fields on the welfare of local community, give jobs and provide training to the unskilled people to enable them to work at the fields in accordance with various agreements and laws governing the companies, say speakers at a workshop on Saturday.

The speakers criticised the centralised policy of awarding oil and gas exploration and production licenses to the companies by the Ministry of Petroleum and Natural Resources.

The workshop on “Oil and Gas Exploration and Production Policy, Laws and Rules” was organised by the Participatory Development Initiatives (PDI) in collaboration with Oxfam and the press club.

They demanded that the elected representatives of federal, provincial and district governments should be involved in the process of awarding licenses in different areas as well as in monitoring the companies’ compliance with legal obligations towards local communities and environment.

They said that Sindh produced 56.6 per cent and 70.1 per cent of total oil and gas production of the country but the companies operating in the province were violating international and national laws and rules and regulations, including Corporate Social Responsibilities (CSR), Petroleum Concession Agreement (PCA), Petroleum Exploration and Production Policy 2007, Pakistan Environmental Protection Act 1997 and other laws.

They said that according to petroleum exploration and production policy as well as Petroleum Concession Agreement (PCA) the companies had to pay 12.5 per cent royalty to local communities living in the oil and gas producing areas but they had been deprived of it.

Similarly, according to Petroleum Exploration and Production Policy as well as Petroleum Concession Agreement (PCA) the companies had to pay production bonus, ranging from $500,000 with the start of commercial production from each field and $5,000,000 in case of production reaching 100 MMBOE.

The amount was to be spent on the development of areas producing oil and gas and communities living there but since the creation of Pakistan local communities had not received even a penny from this amount, they said.

They said that according to the Petroleum Exploration and Production Policy as well as Petroleum Concession Agreement the companies had to spend from $10,000 to 25,000 per year on the training of local communities to enable them to get jobs in the companies.

This amount, too, had never been spent neither was there any system to properly monitor if the companies were fulfilling their legal obligations, they said.