ISLAMABAD - Provinces have asked the federal government that it has no right to renew the expired leases of the Exploration Companies without the consultation with the provincial governments.

The Ministry of Petroleum has no right to amend the matters related to petroleum policy unilaterally and should withdraw the SRO regarding the amendment in Pakistan Onshore Petroleum (E&P) Rules, 2013, demanded the Khyber Pakhtunkhwa government.

“I am directed to refer to DGPC letter No Expl-3 (3) PPL-Sui ML)/2016, Vol II dated 26-4-2017 and SRO 267(I)/2017 dated 14th March, 2017 amending the Pakistan Onshore Petroleum (E&P) Rules, 2013 (Annex-A). In fact, it is not a Rule but a matter of Petroleum Policy-2013,” said a letter written by the KP government to the Ministry of Petroleum and Natural Resources.

The copy of the letter, available with The Nation, further said that under 18th Amendment Article 172 (3) read with 172(1) makes it clear that the provinces are the owners of the Mineral Oil & Gas; however of course both the federal and provincial governments need to jointly evolve course of action for which joint meeting, Anomalies Committee, Article 154, IPCC and CCI would have been a better forums instead of the federal government taking unilateral decisions adversely affecting the rights of the provinces. Furthermore, MPNR does not have any such executive powers as mentioned in the said SRO.

It is the matter related to policy and not rules, and to make amendment to the policy the government has to table the summary in CCI, the source said. The Khyber Pakhtunkhwa government sincerely requests you to withdraw the SRO 267(I)/2017 with immediate effect, the letter said.

The source said that the Sindh will be the biggest affectee of the decision as the leases are getting expired there and now under the amended SRO the federal government has the power to renew them without taking the provincial government onboard, the official said adding that it is the violation of the constitution.

As per the Petroleum Rule, for Re-grant of lease after expiry of lease term, the authority (DGPC) may renew or re-grant, as the case may be, the lease for up to a further five years, provided the lease holder agrees, at least one year prior to the expiry of the lease period, to pay,15 percent of wellhead value of petroleum produced to the federal government. If such agreement is not concluded the authority may invite bids from prequalified companies for the grant of a lease over the same, or substantially the same, area as the expiring lease, for a term of ten years or such lesser period for which commercial production is expected to continue.