ISLAMABAD - Ministry of Petroleum and Natural resources has decided to take stern action against those local and foreign companies, which failed to honour commitments in achieving agreed minimum targets related to Exploration & Production (E&P) activities in country’s oil and gas sector.
Unfortunately, previous governments during last ten years in the history of the country had repeatedly preferred the award oil and gas blocks to those local and foreign companies, which were already engaged in E&P business in Pakistan’s oil and gas sector despite the fact that most of them could not achieve the minimum targets of previous contracts they already had in hand. These companies took part in the bidding and got the blocks situated in different parts of the country after depositing some guarantees in the form of cash with banks. But, so far these companies did not bother to initiate work and came up with inappropriate excuses besides depriving the country of huge investment and modern technology in E&P sector that the country direly needs.
Senior official sources in the ministry of petroleum & natural resources on the condition of anonymity disclosed to The Nation that on finding no work at site from the companies, the federal government has decided to cancel the award of oil and gas blocks earlier given to some E&P companies. The petroleum ministry would soon approach the Prime Minister to get his nod towards revocation of the awarded blocks and confiscation of deposited guarantee in cash.
“Some of the players including Paige, RDC and Nativus could not complete their work units and did not come up with the required investment besides their performance was not up to the mark but they managed to get more blocks,” the officials said. They also said that these companies even did not bother to initiate work on site and presented lame excuses like poor law and order situation etc when inquired about lagging behind in achieving the agreed minimum targets,” said a senior official at petroleum ministry. He also said that these companies by not initiating work at gross root level have caused hefty losses and virtually deprived the country of huge investment and modern technology in E&P sector.
The official further deplored that even those companies, which could not implement the work plan, managed to get new blocks. The general practice is that the company, which gets hold of the block, offloads its rights to other companies and earns a lot in case no success in exploration and production is made.
Giving more details, the sources also said revocation of award of oil and gas blocks named as Islamgarh, Changai, Morgah, Multanai, Lu Gai, Horamzai, and Lad Gasht is expected very soon due to absence of E&P activities. However, the incumbent regime altogether contrary to previous governments is proactively pursuing and leaving no stone unturned to tap country’s oil and gas at maximum level with objective to meet the burgeoning energy needs of the country.
When contacted with energy experts, they were of the opinion that the E&P activities could be accelerated only if the foreign companies with strong financial background and modern technologies were given the blocks. They also said that the government should blacklist the companies which could not bring investment under petroleum concession agreement and did not fulfil agreed commitments related to speeding up E&P activities in various parts of the country. To them, mere cancellation of award of block would not work in such cases.