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July 5, 2019

Govt finalises changes in petroleum policy ahead of exploration blocks’ auction

Business

July 5, 2019

KARACHI: The government has finalised changes in petroleum exploration policy to attract foreign companies ahead of planned 35 oil and gas concessions blocks’ auction by the end of the current year, a government official said on Thursday.

Nadeem Babar, special assistant to Prime Minister on petroleum said the proposed amendments in policy would come into effect in the next three to four months. “We are in talks with several international exploration companies and signed agreements with some of them, including Kuwait Petroleum, who have shown interest in Pakistan’s exploration and production sector,” Babar told newsmen at the Pakistan Petroleum Limited (PPL) head office.

Agreements would soon be signed with a couple of European companies, while Exxon Mobil had also expressed intention to acquire exploration blocks in the upcoming auction. Babar said many foreign E&P companies in the previous years, left Pakistan due to regulatory issues and procedural hurdles.

“We have identified six to seven issues in the petroleum policy that were discouraging foreign companies’ and draft amendments have been prepared, which would be implemented in a couple of months,” he said.

PM special assistant said auction of 35 new blocks would commence by the end of this year and would continue till the end of the next year. “Moreover, the government is conducting surveys and studies pertaining to these new blocks so that the intending companies should decide in which blocks they want to bid for,” he said.

Babar said the country’s E&P sector was inactive, as there had been no auction of blocks in the last few years, while the companies, including PPL and Oil and Gas Development Company (OGDC) were directionless due to the lack of government support.

“We have to revive these companies and increase indigenous production of oil and gas given the country’s economic situation,” Babar said, adding that the government would extend all support and facilitation to these companies.

Talking about the offshore exploration, the prime minister’s special assistant said it was unfortunate that the Kekra-I project failed, but exploration activities would continue in the high-prospect offshore region.

PPL acting managing director Moin Raza Khan said the existing gas reserves were depleting and the company was focusing on organic growth through new blocks. The last bidding round was held in March 2013.

According to reports, 113 new oil and gas discoveries were made in around five years and 73 supplemental agreements were signed to provide better price incentives of the Petroleum Policy 2012 for holders of older petroleum concession agreements. At present, Pakistan produces around four billion cubic feet of gas/day (bcfd) and 86,000 barrels of oil/day.

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