PD presses CCI to extend favors to polish firm
Aftab Ahmed
The Petroleum Division has proposed the Council of Common Interests (CCI) to amend Petroleum Policy 2012 to favor a Polish energy firm.
Polish oil and gas Exploration Company has already availed conversion into petroleum policy 2012 to get higher gas prices. However, Petroleum Division wants CCI to amend the Petroleum Policy 2012 to grant further concession.
Moreover, the government had also granted a higher price to the polish firm under Tight Gas Policy 2011.
https://newztodays.com/cci-to-empower-ogra-to-notify-increase-in-gas-prices/
Now, the petroleum division proposed CCI to extend favors to one foreign company.
The government had granted Petroleum Exploration License for Kirthar Block to Polish Oil and Gas Company (PGNiG). It granted a license on May 18, 2005, under the petroleum Policy, 2001.
The government and polish firm signed a Supplemental Agreement on December 12, 2013. It signed an agreement to avail of the incentives provided in Tight Gas Exploration and Production Policy 2011.
The Company also exercised the option for conversion to Petroleum Policy 2007. Subsequently, the company deemed exercised under the Petroleum Policy 2009 and Petroleum Policy 2012.
However, the Supplemental Agreement of PGNiG for conversion to 2012 Policy was not processed due to an impediment contained at Paragraph 6.1(7) of the Policy stating that“ Those E&P companies who opt for conversion to this policy would not be entitled to tight gas policy and low BTU policy.'”
The intent to convert the old PCA/Licenses/leases to the Policy 2012 was to provide the exploration and production companies a level playing field.
However, the presence of this provision of the 2012 Policy is resulting in a situation. The license holders under the 2012 Policy can avail of the benefit of Tight Gas Policy. However, those licenses which have converted to the Policy 2012 are not entitled to the incentives of Tight Gas Policy.
Amendment in Petroleum Policy
Although the 2012 Policy does not explicitly bar conversion to 2012 Policy to those companies who have already availed the concessions under Tight Gas or Low Btu Gas Policy, it carries an implied assertion for such an exclusion.
Furthermore, a reservoir can encounter both conventional and tight gas. The government cannot deprive companies of the incentives investing in Pakistan.
CCI had approved an amendment in Petroleum (Exploration and Production) Policy 2012 incentives for Conversion to Petroleum Policy 2012 vis-à-vis Tight Gas Policy 2011 the Petroleum Exploration & Production Policy 2012(2012 Policy). The government was notified on August 8, 2012.
The objective was to achieve maximum self-sufficiency in energy by increasing oil and gas production.
Subsequently, CCI also approved amendments in the Policy in December 2019. However, Paragraph 12.6 of the Policy bars incentive for the Polish oil firm. It states the incentives of this Policy shall apply to E&P companies applying for new petroleum rights.
