The Ministry of Petroleum and Natural Resources seems constrained to penalise and take stern action against those exploration and production companies which have failed honor the terms of Petroleum Concession Agreement (PCA).

Although the ministry has revoked the licenses of the non-performing E&P companies, but under existing rules it can’t go beyond a certain limit. However it can ‘blacklist’ the companies by following Pakistan Petroleum (Exploration and Production) Rules 2001 and the Securities and Exchange Commission of Pakistan’s (SECP) companies’ ordinance 1984.

The National Assembly’s standing committee on Petroleum and Natural Resources, that met here under the chair of Bilal Ahmed Virk, asked the ministry that why agreement violating companies were blacklisted despite the fact that they have failed to meet the required criteria.

The committee also suggested the ministry to follow the E&P Rules and also the SECP rules and declare them (companies) blacklisted for not bringing investment under PCA and failing to fulfil agreed commitments related to speeding up E&P activities in various parts of the country. They were of the view that mere cancellation of award of block would not work in such cases.

Although the government has revoked ten petroleum exploration licences of five E&P companies, but at the same time it has no powers to take further step of ‘blacklisting’ them despite the fact that a 30-day period was given to them for liquidating damages for unfulfilled minimum work and not discharging other obligations.

The companies were asked to deposit within 30 days of the issuance of letters to liquidate damages for unfulfilled minimum work programme and un-discharge other statutory/contractual obligations as to training, social welfare and rental payments arising from petroleum concession agreement (PCA) and the Rules.

It was clearly mentioned in respective letters that failure to comply with requirements in 30 days, shall result in, without prejudice to any other claim or remedy available to the government against the company, blacklisting of the company pursuant to Rules 26 of the rules which preclude them from participation in the grant of petroleum rights or in any other activity in the E&P sector in future.

Nasir Khan Khattak, MNA, questioned the petroleum ministry that why did not it blacklist the companies despite the fact that they didn’t fulfil the requirements for months. “Why they have been given the blocks for 20 years lease while they are doing nothing?”he asked. They should be blacklisted, he said. “Along with blacklisting the company, its directors must also be blacklisted, as they then open other companies for the same business” Khattak added.

The committee was further told that Dewan Petroleum has five blocks and has failed to start committed work. The decision regarding to the fate of Dewan Petroleum will be announced within a week time. The committee directed the ministry and DG petroleum concession (PC) may apprise the committee about the status of recovery/payment in terms of LDs against unfulfilled minimum work programme, fine accured, social welfare, training and rentals, from the defaulting companies in the next meeting.

Federal Minister for Petroleum and Natural Resources (P&NR) Shahid Khaqan Abbasi, Jam Kamal Ahmed, minister of state for P&NR, Shazadi Umarzadi Tiwana, parliamentary secretary, also attended the meeting.

The meeting was also attended by Malik Ihtebar Khan, Tariq Mehmood, Rana Muhammad Ishaq Khan, Sardar Ali Gohar Khan Mahar, Nawab Ali Wasan, Shehryar Afridi, Nasir Khan Khattak, Pir Bux Junejo, Federal Minister for housing and works Akram Khan Durrani.