K-P to demand right to award oil blocks in CCI meeting

Federal govt has refused to delegate powers to provinces despite passage of 18th Amendment

PESHAWAR: The Khyber-Pakhtunkhwa (K-P) government has decided to discuss the devolution of concession powers over petroleum blocks from the federal to provincial governments in the Council of Common Interests (CCI) meeting scheduled on Wednesday.

Administrative secretaries of K-P’s finance, energy and power, irrigation, forestry and Zakat departments have been called by the chief minister to the Khyber-Pakhtunkhwa House in Islamabad to brief him about the urgent talking points of the meeting.



Sources privy to the development said the Directorate General of Petroleum Concessions (DGPC) had been delaying the grant of concessions for blocks located in K-P which, after the 18th Amendment to the Constitution, should legally be awarded by the provincial government.

The K-P government has already tried to delegate these powers to the K-P secretary energy and power. The development, however, has reached an impasse, since the federal government has refused to accept the demand, an official of the K-P government said.



“Now, we are taking the issue to the CCI to resolve it,” the official said, adding the DGPC was not giving petroleum concessions to the K-P energy and power department for the blocks located in the provincial jurisdiction.

“The K-P government has demarcated seven blocks including Lakki, DI Khan East, DI Khan West, Nowshera, Khushal, Charsadda and Miran for petroleum exploration, but the DGPC has not awarded permits due to which work has not started,” the official elaborated.

“If the CCI decides the issue and delegates the concession-awarding powers to the provincial governments, then we would be at liberty to start oil and gas exploration and attract foreign investment in the sector,” the official emphasised.

The K-P government would also lobby for a higher share in net hydel profit (NHP) and liquefied natural gas (LNG) and natural gas supply to villages located within 5km radius of gas wellheads at the CCI meeting, sources added.



The provincial government wants the NHP to be calculated under the AGN Kazi formula agreed with the federal government in February 2016.

An official privy to details said the principal amount of NHP received by K-P would jump from Rs18 billion to Rs94 billion if the AGN Kazi formula was implemented.

Another official said the K-P government would ask the federal government to pay for gas supply to the houses in areas located within 5km radius of gas wellheads.

Published in The Express Tribune, August 22^nd, 2017.

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