K-P gas theft causing annual loss of Rs8 billion, claims Abbasi

Minister rejects province’s claim that centre is not issuing NOC to exploration firm

Zafar Bhutta February 23, 2016
The company (Hycarbex-American Energy Inc) had failed to pay Rs81 million in financial obligations to the government for training, area rent and social welfare. PHOTO: FILE


Federal Petroleum Minister Shahid Khaqan Abbasi has claimed that gas theft in Khyber-Pakhtunkhwa is causing a loss of Rs8 billion to the country every year and the province has done nothing to arrest it.

Speaking at a press conference on Tuesday, the minister though acknowledged that all provinces had faced gas theft and wastage but said in Karak villages in K-P gas was being stolen openly and on a massive scale. “Even the chief minister of K-P has expressed his inability to control the theft,” Abbasi said.

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He categorically rejected Pakistan Tehreek-e-Insaf chief Imran Khan’s claim that the federal government was not issuing no-objection certificate (NOC) to Hycarbex-American Energy Inc for undertaking oil and gas exploration in K-P, which was causing a loss of billions of rupees.

Elaborating, the minister said Hycarbex-American Energy Inc was granted an exploration licence on June 4, 2010 for the Peshawar block in the districts of Peshawar, Orakzai, Nowshera, Kohat, Hangu and Khyber Agency initially for three years for making an investment of $5.9 million.

After the PTI’s allegation, representatives of the company were called at the office of Director General Petroleum Concession where they categorically stated that they had no complaints against the petroleum ministry as no NOC was required or pending with the federal government.

According to Article 3.2(b) of the Peshawar block petroleum concession agreement, said the minister, the operator was bound to commence joint operation within 90 days, but the company did not initiate work even after more than five years.

“The company did not discharge even a single work unit and later requested an extension in the exploration licence without any cogent reason, so a 60-day notice was issued to the company on September 18, 2015,” he added.

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In the meantime, the company management changed pursuant to the finalisation of the award of arbitration proceedings outside Pakistan. The government is currently considering the company’s request for extension in the exploration licence.

Abbasi said despite the lapse of time, the government had not cancelled the licence due to dispute in the company management. After resolution of the dispute, the company was allowed to carry out its work.

He pointed out that the company had failed to pay Rs81 million in financial obligations to the government for training, area rent and social welfare.

Responding to a question, the minister revealed that notices had been issued to 21 petroleum exploration companies for not carrying out promised work, of which 15 licences were cancelled. To another question, he replied that despite the federal government’s repeated requests, K-P had failed to address issues pertaining to Rs8 billion worth of gas theft.

Responding to the Sindh government’s announcement of ending outages for compressed natural gas (CNG) stations in the province, Abbasi stressed that they needed more gas for ensuring a smooth supply to the filling stations, but it was not possible to allocate a gas field in the current scenario. However, the centre has offered liquefied natural gas (LNG) supply to the province.

LNG import, IP pipeline

Speaking about LNG imports, Abbasi said although India was buying 8.5 million tons from Qatar compared to planned purchase of 3.75 million tons by Pakistan, “our import rate is cheaper”. LNG purchases from Qatar will start in March this year.

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Regarding the Iran-Pakistan (IP) gas pipeline project, the minister announced that he would visit Tehran next month to discuss the matter. “Earlier, I was planning to go to Iran in February but due to the LNG deal it could not happen.”

“It is a Pakistan-specific pipeline and it is over (for India),” he remarked, saying the government could negotiate another agreement with India for the pipeline from Iran.

Published in The Express Tribune, February 24th, 2016.

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Muhammad Adnan | 5 years ago | Reply @Adnan Siddiqui and ill manners walk together. If you were to give any advice please give it to your lunatic leader Altaf Hussein who is openly giving reproductive lectures to the public.
Adnan Siddiqi | 5 years ago | Reply @PashtunZalmi: Dude, do us all a favor. No need to take up arms against the state because its mightier than us all. Instead, you and your ilk can walk through Khyber Pass and enter in Afghanistan to make that war torn post-apocalyptic type county your new home. If you are still experiencing an itchy trigger finger - than try taking up arms against the thugs, barbarians and terrorists of TTP who are waging a war in your backyard. Finally, quit spewing your racial bile here.
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