PESHAWAR: The Peshawar High Court has declared that the federal government can’t deal with the natural oil and gas resources unilaterally as it is bound by the Constitution and the Petroleum Policy, 2012, to involve the respective provinces for it.

A bench consisting of Justice Lal Jan Khattak and Justice Shakeel Ahmad disposed of a petition filed by the Khyber Pakhtunkhwa Oil and Gas Company Limited (KPOGCL) against the decision of the federal government’s Directorate General Petroleum Concession (DGPC) to sever 738 square kilometres area from the Wana petroleum block and merge it with the nearby Baska North petroleum block through a notification on Oct 25, 2021.

It observed that certain provisions of the Petroleum Policy, 2012, and the Pakistan Onshore Petroleum (Exploration and Production) Rules, 2013, weren’t followed by the DGPC, so it would issue certain directions to the federal government and DGPC on it in the detailed judgement.

The petitioner claimed that the alteration of the size and shape of the highly prospective Wana Petroleum Block was contrary to the relevant constitutional provisions, rules and petroleum policy.

Court disposes of plea against merger of petroleum blocks

Barrister Asadul Mulk appeared for the petitioner, while the provincial government was represented by advocate general Shumail Ahmad Butt.

Additional attorney general Aamir Javed showed up for the federal government and DGPC and advocate Naeem Bukhari for the Al-Haj Enterprises Private Limited.

Mr Mulk argued that following the enactment of the Constitution (Eighteenth Amendment) Act, oil and gas found feature at Serial No 2 of Part-II of the Federal Legislative List and so, under Article 154 of the Constitution, the Council of Common Interest was to exercise supervision and control over oil and gas matters and enact policies in respect thereof.

He argued that ‘policies’ made under Article 154 of the Constitution were binding, obligatory and mandatory.

He stated that in 2019, the petitioner, which was a provincial holding company, delineated the Wana Petroleum Block over 1,744 square kilometers of land in Tank and South Waziristan districts.

He said the Wana Petroleum Block, in its original shape and size, was a compact block covering 1744 square kilometres of land and was considered to be a highly prospective block based on the newly emerged developments in the nearby blocks.

He said the DGPC issued the impugned notification on Oct 25, 2021, illegally revising the coordinates of Baska North Block and the compact Wana Block, while around 42 per cent of the original Wana Block was granted to the Al-Haj Enterprises Limited.

Advocate general Shumail Ahmad Butt supported the petitioner’s contention and said the DGPC had wrongly carved out an area from one block and added it to the Baska North block without consulting the provincial director (petroleum concession),which was contrary to Clause 1.3.6 of the Petroleum Policy, 2012.

He contended that provincial director was to be necessarily taken in loop for such upstream decisions in light to Petroleum Policy, 2012, and Petroleum Rules, 2013, and the matter needed to be remanded to authorities to be decided afresh while involving the director nominated by the provincial government.

Mr Butt outlined the legislative history and wisdom of the 18th Amendment.

He contended that the DGPC and federal government didn’t comply with mandatory provisions of the Petroleum Policy 2012 and the Constitution.

Mr Bukhari and Mr Aamir Javed argued that the impugned acts of the respondents were in accordance with the law, and the dispute was essentially one between the federation and the province which as per the bar contained in Article 184 of the Constitution could not be agitated before a high court as the Supreme Court had the exclusive authority to adjudicate such disputes.

They contended that the petition was not maintainable, so it should be dismissed.

Published in Dawn, December 8th, 2022