$5bn investment in oil & gas sector: 18-member panel fails to hold its first meeting in given 3-week time

ISLAMABAD: An 18-member committee, constituted under Deputy Prime Minister Senator Ishaq Dar, to finalise a plan for seeking investment in the oil and gas sector from the Exploration and Production (E&P) companies, has failed to hold even its maiden meeting in the given three-week time.

The committee was constituted by the prime minister on July 5, 2024 to finalise a plan to seek $5bn investment in the oil and gas sector by finding the way out to implement the amended E&P policy, allowing the Exploration and Production companies to sell 35 per cent gas from discoveries to private sector firms under the third party rules.

The committee was given three-week time to work out plans on how to cope with the monster of circular debt in the gas sector, operationalise the Tight Policy 2024, and other gas-related issues. Three weeks have passed but the committee failed to hold its first meeting and come up with any plan to resolve the issues the oil and gas sector is facing.

However, one of the members of the body, while talking to The News, said it was true the committee did not meet yet, but the required substantial spade work had been completed, which had been submitted to the committee secretariat on various issues.

Meanwhile, the committee was reconstituted and the number of its members was increased to 20 from 18. Names of private sector businessmen Iqbal Z. Ahmad and Ghiyas Abdullah Paracha were added to the committee, showing that the incumbent government was quite serious about working out an inclusive plan to deal with the gas sector issues. “The new names have been added to reach a consensus plan, with input from private sector players.” The new additions to the committee were notified on August 3, 2024.

Now, the 20-member committee would give its set of doable recommendations to resolve the monster circular debt in the gas sector that had reached Rs2900 billion, avoid gas curtailment due to lack of integrated planning by firming up integrated energy plan, review fiscal regime for E&P sector and develop proposals to make it more conducive for investment and for framework for providing enhanced security in high-risk areas without entailing additional cost to E&P sector, especially during the exploration stage.

In addition, the committee will also finalise the plan with a set of proposals to promote a business-friendly environment for E&P companies and investors, to review contract-related issues, highlighted by the E&P companies, and to suggest a way forward and attract investment in off-shore exploration. The committee would also propose steps for early operationalisation of the Amended Petroleum Policy, 2012, and Tight Gas Policy, 2024 apart from making a plan for full automation or digitisation of oil and gas exploration concession and licensing regime in Directorate General of Petroleum Concessions, providing online submissions, approvals, and licensing based on international best practices of transparency and ease of doing business. The committee would also come up with proposals for benchmarking of port charges for LNG cargo against regional and international ports and suggest a way forward.

The 20-member body would also make recommendations for exploring the possibility of allowing the private sector as third parties to import RLNG under long-term contracts.