ISLAMABAD - The provinces have demanded the federal government to award oil and gas exploration blocks to the Provincial Holding Companies (PHCs) without competitive bidding, it was learnt reliably here Thursday.

“The government of Khyber Pakhtunkhwa has proposed to the federal government that a one time relaxation may be allowed for award of one new exploration block to each of the 4 PHCs in their respective provinces and one block to GHPL in any part of the country without competitive bidding,” according to official documents available with The Nation.

The award of petroleum rights to Federal and Provincial Holding Companies (PHCs) without competitive bidding is also on the agenda of the CCI meeting scheduled today (Friday). The meeting of CCI was earlier scheduled in Peshawar but the venue was later changed and now it will be held in Islamabad, official document revealed. The agenda and venue for the CCI meeting was changed several times on November 17th, 21st and 23rd.

According to the summary presented by the KP government, “The overall schemes for award of petroleum rights is based on competitive bidding process which also applied to public sector companies. However, the national oil companies representing foreign governments are assigned status of strategic partners and can be granted petroleum rights without competitive bidding.” When the Middles Eastern and Chinese companies are getting the contracts without bidding process, then such facility should also be available to the 100 percent provincial owned companies, official documents said. “Pursuant to Article 4.1.3(6) of the Petroleum policy 2012, all the provinces have established their own PHCs. KPOGCL has discussed the matter with MPNR to grant new exploration blocks located in the provinces without following the competitive bidding while following and fulfilling all other requirements of the policy,” the document said.

The Petroleum Division is of the view that the 2012 petroleum policy doesn’t allow granting petroleum rights without bidding. To allow PHCs to enhance their investment base and encourage the much needed investment in the exploration activities, government of KP has proposed that a one time relaxation may be allowed for award of one new exploration block to each of the 4 PHCs in their respective provinces and one block to GHPL in any part of the country without competitive bidding. As per the claim of the provincial government, Directorate General of Petroleum Concession (DGPC) has agreed with the proposal of government of KP.

The proposal presented by KP includes that the PHCs to whom block awarded would remain the majority shareholders. The block awarded to the PHC can only be farmed out to Pakistani public sector exploration and production companies including GHPL. PHCs will enter into a petroleum concession agreement (PCA) in accordance with approved Model PCA. The obligations pertaining to production bonus; training and social welfare shall be applicable to PHCs without any exemption whatsoever.

As PHCs do not possess prior experience of operating concessions/blocks, the PHCs shall be required to either produce an agreement with an internationally renowned E&P services company acceptable to DGPC or a high caliber technical and management team with proven track record of overseeing and managing operations in the international petroleum industry.

The recommendations of the IPCC and Sub-Committee of CCI pertaining to the matter of HEC, import of LNG, supply of gas to localities/villages in 5KM radius of gas production fields, implementation of Article 154 of the constitution of the Pakistan, endorsement of policy on gas sector reforms and implementation of CCI’s decision on NHP will also be discussed in the meeting.

The ministry of Water Resources will make a presentation on the National Water Policy.

Official sources said that the proposed National Water Policy also includes the formation of National Water Commission which will have the minister of water resources as head and will include all the chief ministers, irrigation secretaries and prominent politicians as its members. The decision of National Water Commission was taken to develop consensus on the future matters related to water sector.