Last Updated on Tuesday, 30 November 1999 05:00 Tuesday, 28 August 2012 16:29
ISLAMABAD: The Ministry of Petroleum and Natural Resources (MP&NR) has asserted to exceed local crude oil production to 100,000 barrels per day from the current 67,000 barrels per day and gas production from 4.2 billion cubic feet per day (BCFD) to 5 BCFD till mid of upcoming calendar year 2013.
The federal government on Monday unveiled a new petroleum policy in a bid to attract investment in oil and gas sectors to enhance local production.
While addressing a press conference Adviser to Prime Minister on Petroleum and Natural Resources Dr Asim Hussain said the country would be meeting its oil requirements by 25 percent from its indigenous resources.
He said that the current winter season would not be tough regarding gas shortage. “We will add 400 to 500 million cubic feet per day (MMCFD) gas in the system from exiting gas fields,” he said and added that the situation of gas supply in Punjab was also better where industry was being provided gas for five days a week.
He said that the concerned ministry and its subordinate institutions have also found a solution to gas supply for fertilizer sector that would get direct supply from gas fields, adding that Pakistan would be in a position to export fertilizer in a year. He said that the government would continue restriction in compressed natural gas (CNG) stations policy.
The government would eliminate subsidy gradually in gas sector and only lifeline consumers would be provided subsidy and admitted that progress on liquefied natural gas (LNG) and liquefied petroleum gas (LPG) projects has been slow, adding that India had also offered to provide 200 MMCFD LNG on Lahore border for a five-year period.
While highlighting the salient features of the new policy, he said that in order to attract the much-needed foreign investment in exploration and production (E&P) sector of Pakistan, better gas price had been given at $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. He said that the government would give $1 per MMBTU to the companies on first three discoveries from offshore fields.
“We will hold road shows on new petroleum policy including Turkmenistan- Afghanistan-Pakistan and India (TAPI) gas pipeline project abroad to raise investment and funds for the pipeline project,” he said and added that price of gas to be imported from Iran was $12 per mmbtu calculated at $100 per barrel oil whereas gas price in Zone-1 in Pakistan would be $6.7 per MMBTU. The current price of gas is $4.2 per MMBTU.
Responding to a question, he said that the federal government had proposed to invest 50 percent royalty collection in the district of oil and gas production. However, provinces opposed and it was decided to utilise 10 percent of the royalty in the district where oil and gas is produced for infrastructure development.
“E&P companies would have right to sell 10 percent to the third party whereas state-owned companies would have right over 90 percent production,” he said and added that Premier Oil firm has committed to invest $30 million to $40 million in exploration whereas KufPak has made the same commitment,” Dr Hussain said and added that exploration companies were very optimistic in exploration activities and they would give final plan in a week. He said that MOL firm had also promised to enhance exploration activities.
According to highlights of the new petroleum policy, the period of exploration licence has been reduced from nine to seven years, like, five years in initial term (Phase-I of three years plus Phase-II of two years) plus two renewals of one year each; similarly appraisal renewal period has been reduced from two years to one year.
Base price of crude oil and condensate for windfall levy has been increased from $30 per barrel to $40 per barrel; which will escalate each calendar year by $0.5 per barrel; windfall levy will be equally shared between the federal and provincial governments.
Gas pricing ceiling has been set at $100 per barrel replaced with $110 per barrel; Provincial Government Holding Company shall also have the first right to makeup required minimum of Pakistan’s working interest without reimbursement or payment of any past cost; renewal of lease after expiry of lease term for another five years will be subject to payment of an amount of 15 percent of the wellhead value; and in the policy 2012 gas price will also be extended to the leases for additional 10 percent production over and above the commitment of development plan approved by the government.
Courtesy: Daily Times
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