THE ministry of petroleum and natural resources has, through the Directorate-General of Petroleum Concessions, so far issued the policy document on petroleum exploration and production in 1991, 1993, 1994, 1997, 2001, 2007 and 2009.

This track record of rewriting the policy, mostly at short intervals, reflects a visionless approach of the directorate in dealing with the lifeline sector of our economy.

It is astonishing to note that the policy objectives and the policy requirements in 2007 and 2009 are exactly identical. How does then the directorate justify bringing out a fresh policy?

The only explanation that comes to mind is that some minor changes were required to be incorporated in the economic package and/or regulatory process.

But such realignments did not warrant a policy to be reissued in 2009, as these could have been addressed in the rules framed under the Regulation of Mines and Oilfields and Mineral Development (Government Control) Act, 1948.

Such rules were notified in 1949, 1986, 2001 and 2009.

So much for pointing out a conceptual flaw, let me now reveal a glaring disregard for the '1949 Rules' by the Directorate-General of Petroleum Concessions which had introduced the Petroleum Development and Production Lease under the Pakistan Petroleum (Exploration and Production) Rules,1986.

Prior to these rules, the petroleum mining lease was granted for 30 years with a provision for extension for a similar period under the Pakistan Petroleum (Production) Rules1949, which were repealed and replaced by 1986 Rules.

Nevertheless, a transitional clause was stipulated in 1986 Rules which read as follows

“Notwithstanding the repeal of the Pakistan Petroleum (Production) Rules 1949, hereinafter referred to as the said rules, where any person holds any permit, licence or lease granted or renewed under the said rules, the provisions of the said rules shall continue to apply to such permit, licence or lease as if the said rules have not been repealed.”

But the Directorate-General of Petroleum Concessions acted arbitrarily and precluded extension of petroleum mining leases which were submitted to it for renewal by relevant oil and gas exploration and production companies.

The same were, however, reissued as development and production leases under 1986 Rules for a term of five years, with one extension for a similar period.

This meant reducing the legal validity by 20 years. It must be realised that foreign oil and gas exploration and production companies are shy of investing in a high-risk business if long-term returns are seen under a threat of curtailment at the whims of the directorate.

Coming back to the latest Petroleum Exploration and Production Policy (2009), the same needs to be revisited objectively by the directorate in close consultation with stakeholders across the board. A policy having consensus should then be implemented vigorously in letter and in spirit.

The bureaucratic functioning of the directorate is another major hurdle that hampers oil and gas exploration and production companies from meeting the target dates of their ongoing projects of vital national importance.

This mindset has to change if we, as a nation, are earnest in developing our energy resources on war footings.

HAROON R SIDDIQI
Karachi