ISLAMABAD  - Adviser to PM on Petroleum Dr Asim Hussain on Monday unveiled the Petroleum (Exploration and Production) Policy 2012, promising more incentives to foreign investors for expediting exploration and tapping indigenous resources to enhance oil and gas production.

“Under the new policy, 15 companies will initially invest $100 million in oil and gas exploration, taking the latter’s production to 5 billion cubic feet by mid-next year,” he told the media on Monday, adding that gas loadshedding will end next year though the load management plan for the CNG sector will continue.

“To accelerate the exploration, the period of exploration licence had been reduced from nine to seven years – five years initial term (Phase-I of 3 years and Phase-II of 2 years) followed by two renewals of one year each,” he added.

Asim said the appraisal renewal period had been reduced from two years to one year. “To attract much-needed foreign investment in the exploration and production sector, a competitive gas price had been offered – $6 per MMBTU for Zone-III, $6.3 per MMBTU for Zone-II, $6.6 per MMBTU for Zone-I, $7 per MMBTU for Zone Offshore Shallow, $8 per MMBTU for Zone Offshore Deep; and $9 per MMBTU for Zone Offshore Ultra Deep. Similarly, the windfall levy has been reduced from 50 to 40 per cent.”

The adviser said the base price of crude oil and condensate for the windfall levy had been increased from $30 to $40 per barrel and it would escalate each year by $.5 per barrel while the windfall levy would be equally shared between the centre and the provincial government.

Asim said the provincial government holding company would also have the first right to make up the required minimum Pakistan working interest without reimbursement or payment of any past cost.

“The renewal of lease after expiry of lease term for another five years subjects to payment of an amount of 15 per cent of wellhead value; sale of 90 per cent share of pipeline specification gas to government of Pakistan and 10 per cent by exploration and production companies to any buyer with prior consent of government.”

He said a bonanza of $1/MMBTU would be given for the first three discoveries in offshore area and 10 per cent of royalty would be utilised in the district where oil and gas produced for infrastructure development. “For pricing and delivery obligations for natural gas, the gas would be delivered at outlet flange (field gate/ delivery point).”

The Sui Southern Gas Company (SSGCL) and the Sui Northern Gas Company Limited (SNGPL) will be responsible for laying pipelines for which they will get tariff on transportation of gas as approved by the Oil and Gas Regulatory Authority (Ogra). For offshore, gas will be delivered at nearest access point to an existing regulated transmission system; or at the shore within coastal locations, he added.

Oil, gas exploration to be expedited