Lack of NOCs stops exploration work on 24 blocks

Updated November 23, 2019

Email

Auction of fuel exploration blocks is subject to security clearance of the areas concerned by the defence ministry, says petroleum secretary. — Reuters/File
Auction of fuel exploration blocks is subject to security clearance of the areas concerned by the defence ministry, says petroleum secretary. — Reuters/File

ISLAMABAD: The auction of 24 oil and gas exploration blocks has been delayed for more than six months because the defence ministry has not issued a security clearance for the exercise, a senior government official told a parliamentary committee on Friday.

Testifying before the Senate Standing Committee on Petroleum, the petroleum secretary, Asad Hayauddin, said the auction of fuel exploration blocks was subject to security clearance of the areas concerned by the defence ministry.

He said the petroleum division had requested the ministry to issue no-objection certificates (NOCs) for the 24 blocks some six months ago, but the clearance was still awaited.

In June last year, then petroleum secretary Sikandar Sultan Raja had also complained to the committee that his department had been waiting for clearance for 30 to 40 exploration blocks since long.

“We have made our best efforts, but these are not getting clearance from the defence ministry. This is the country’s loss,” Mr Raja had told the committee.

Gas supply situation expected to be satisfactory this winter, official tells parliamentary committee

He added that it was mainly because of this reason that petroleum division had not been able to offer any worthwhile block for exploration over the previous several years.

A senior official told Dawn that the division had also proposed a time-bound process for issuance of NOCs so that fresh blocks could be offered at regular intervals to local and international companies for exploration, but in vain.

The committee was also informed that state-run Oil and Gas Development Company Limited was planning to drill a well in Sindh for exploring shale gas.

The parliamentary committee was also given a briefing on the Petroleum Policy 2012, the rights and shares of the provinces under Article 172(3) of the Constitution, and the details of concession agreement and corporate social responsibility (CSR) activities of the companies under the policy.

The director-general for Petroleum Concessions Imran Ahmed told the committee that the total oil and gas production in the country stood at 89,030 barrels per day (BOPD) and 3,935 million cubic feet per day (MMCFD) in 2018-19.

The energy mix of the country comprised 34 per cent natural gas, 31pc oil, 13pc coal, 9pc liquefied natural gas and 1pc liquefied petroleum gas while the rest came from other sources, the committee was informed.

The total sedimentary area was said to be of about 827,268 square kilometres and the area under exploration was 224,976 square kilometres.

Mr Ahmed said that as of Friday, the total number of fuel discoveries made in the country stood at 394 with 85 of oil and 309 of gas, the success rate being about 34pc.

He said the Petroleum (Exploration & Production) Policy 2012, which governed the complete process associated with this sector, was approved by the Council of Common Interests. He also briefed the panel about the process of awarding blocks, the fiscal regime and licensing zones, producers’ oil and gas pricing mechanism, royalties and income tax, incentives for unconventional hydrocarbons and other obligations including social welfare in the local population.

The meeting directed the ministry to work on inclusion of senators as well as members of the National Assembly in the social welfare committees across the country in addition to implementation of CSR schemes.

The committee also sought complete details of how much money had so far been spent on CSR and social welfare work and details of development or infrastructural projects undertaken.

The committee was told that none of the provinces except Khyber Pakhtunkhwa had so far nominated their focal persons to work with the director-general for petroleum concessions to ensure smooth implementation of Article 172(3) of the Constitution with regard to oil and gas production. The committee decided to write a letter to chief secretaries of the three provinces, asking them to send their nominees at the earliest.

While discussing a resolution passed by the Senate in 2016 regarding supply of natural gas to residents of Circles Lora, Baghan, Bakot, Upper Lower Galiyat on a priority basis, Senator Javed Abbasi told the panel that after detailed consultations and in-depth survey of the area the estimate drawn for one circle was more than Rs20 million. He said the supply of gas could be arranged in phases to ensure timely completion of the process.

The committee directed the Sui Northern Gas Pipelines Ltd (SNGPL) to work out a plan with the mover (Mr Abbasi) and report to the committee.

The committee was informed by the managing director of SNGPL, Amir Tufail, that gas supply to residential consumers had generally been satisfactory during last year’s winter, apart from “a few complaints” about low pressure. He said the supply situation was expected to be even better this winter as enough LNG supplies had been lined up to bridge the shortfall.

Published in Dawn, November 23rd, 2019