Islamabad - The federal government has refused to grant extension to HYCERBEX American Energy Inc for doing the exploration work in Khyber Pakhtunkhwa, it was learnt through reliable sources on Sunday.

“We held a meeting with the KP officials and informed them that they were not going to extend the lease of the company in Peshawar and Karachi blocks,” official in the Ministry of Petroleum and Natural Resources told The Nation.

“The company has already completed its three-year lease period, and it will be in violation of the rules and regulations if it is granted extension,” the source told this scribe.

HYCERBEX American Energy Inc acquired the concession of three oil and gas blocks in KP, namely Yaseen, Karachi and Peshawar; however, the company failed to start work in Karachi and Peshawar blocks. However, an official in the KP government has said that it has been decided to constitute a committee to resolve the matter.

“The committee will be headed by the federal minister of petroleum and natural resources, while it will have representatives from the four provinces, secretary finance and secretary law as its members,” the source added. The federal minister of petroleum and natural resources had announced, at a press conference last month, that lease of the American company would be extended.

A source in the provincial government further said it had been conveyed to the Directorate General Petroleum Concession that delay in starting work on the Peshawar Block was not the fault of the company. “Security situation in KP was the main reason behind the delay,” He said, adding that back in 2013, the company had informed the federal government about the security situation in the area.

“In the past because of the deteriorated security situation in the Peshawar Block area, it was not even possible for the senior federal government officials to enter the area,” the source said, and added, “How can one expect from an American company to start work in these circumstances.”

He said that besides that the company’s internal management issues had also created some hindrance in starting the work in the respective blocks.

“The federal government is well aware of the company’s internal crises and you can never term it negligence on the part of the company,” the source elaborated.

Earlier on November 18, 2015, the company had informed the federal government that the entire management of the company had been changed.

“It was further ensured that the new management would fulfill its obligations,” the source maintained.

In a letter to the Directorate General Petroleum Concession, the company said that “following your office (DGPC) approval of our request to provide security for the outstanding financial obligations to the extent of social welfare and training, we are pleased to enclose corporate guarantees pertaining to the Peshawar Concessional block.”

The letter further said that “the company is hopeful that the regulator will understand our difficulties and grant us some reasonable time frame.”

It was requested by the company to regularise the Peshawar Block from June 3, 2013 to November 20, 2015, and grant extension for a period of 12 months till November 2016.

“The company also offered the Director General of Petroleum Concession post dated checques against the financial obligations regarding Peshawar Concessional Block. A total of seven post dated checques, worth $236,945, were offered to DG PC,” the source concluded.