ISLAMABAD - Perturbed over the issuance of the NOC for five blocks to the KPOGCL, for exploration activities, the Petroleum Ministry has asked the defence division that the blocks cannot be awarded to the company without competitive bidding.
In a letter to the Defence Ministry, director-general of Directorate General of Petroleum Concessions (DGPC) has asked the Ministry of Defence that “we have been informed that that NOC for exploration activities by the Khyber-Pakhtunkhwa Oil and Gas Company Limited (KPOGCL) in five blocks of KP province was issued by the defence division. The blocks where NOC was issued includes Dera Ismail Khan East Block, Miran Block, Lakki Block, Nowshera Block and Dera Ismail Khan West Block."
The director general (PC) further said that so far clearance of none of the 41 blocks except “desert” has been provided due to which Ministry of Petroleum has been unable to initiate the bidding process for awards of blocks.
The copy of the letter available with The Nation further said that provincial director KP has been interacting with Defence Division for clearance of these five blocks and the requests were made for NOC for KPOGCL to undertake exploration activities.
The correspondent made by the provincial director, KP has not been approved by the DG (PC) and therefore the same shall not be treated as official correspondence, the letter said.
In the letter, the DG (PC) claimed that subject of oil and gas were included in part-II of the Federal Legislative List (FLL) and as per constitution the executive authority on the matter falling in FLL rest with the federal government.
The KPOGCL is one of the companies, which may participate in bidding round either as operator or non operator.
However, blocks cannot be awarded to the company without competitive bidding.
The role and function of the provincial directors are subject to administrative control of the undersigned and therefore they cannot interact with any ministry/division/department/institution without prior written approval of the DG (PC).
As a matter of principle, the provincial directors are not allowed to issue letter to any federal ministry/division/department and can only liaison with the government of the concerned province, the letter said.
The DG (PC) has asked the defence division to confirm that clearance of five blocks mentioned at para-5 above is not specific to the KPOGCL and that this ministry may initiate a competitive bidding process after which block will be granted to successful bidders.
However, a source in the provincial government said that the letter was in sheer violation of the constitution which has given equal rights to the federal and provincial government regarding the management of oil and gas sector.
Giving the detail about the issue, the official said that Article 172(3) of the Constitution inserted in the Constitution of Pakistan through Constitution (18th Amendment) Act 2010, defines the ownership of provinces and the federal government in mineral oil and natural gas.
According the petroleum policy, “Subject to the existing commitments and obligations, mineral oil and natural gas within the provinces or the territorial waters adjacent thereto shall vest jointly and equally in that province and the federal government.”
In pursuance of Article 172(3) the Council of Common Interest (CCI) approved Petroleum Policy 2012 formulated by Ministry of Petroleum.
The said policy calls for reorganisation of Directorate General of Petroleum Concessions (DGPC), the KP government official said.
However, four years have passed but the DGPC has so far not been re-organised despite repeated requests by the provinces.
According to Clause 1.3.6 (policy objectives) of the Petroleum Policy 2012 approved by the CCI obligating re-organisation of the DGPC.
According the clause, “To enable a more proactive management of resources through establishment of a reorganised directorate general of petroleum concessions (DGPC) comprising of a federal and provincial representatives with federal director as ex-officio director general and providing the necessary control and procedures to enhance the effective management of Pakistan’s petroleum reserves.”
The government has failed to implement one of the more important clause of the Petroleum Policy 2012, which is in total violation of the 18th amendment and contempt to the Council of Common Interest (CCI)’s decision, the official said.
Although Sindh, Baluchistan and the Khyber-Pakhtunkhwa have appointed provincial directors but DGPC is not paying them salaries and they are working without any payment for the last one year, he added.