The government has granted another two-year extension in the development and production lease of Missa Keswal field being operated by Oil and Gas Development Company Limited (OGDCL).
The field is located in Punjab. The government has granted the extension keeping in view the current energy crisis in the country.
The Petroleum Division had informed policymakers that Pakistan was facing challenges in meeting the ever-growing energy need due to an expanding population, natural depletion of major oil and gas fields, increase in demand and dearth of new discoveries.
It stressed that increasing the exploration and development activities was essential to overcome the challenge.
The division told the Economic Coordination Committee (ECC) in a recent meeting that the activities were critical for the growth of Pakistan’s oil and gas industry and for long-term energy security.
The government was taking various measures, including the extension and renewal of leases as well as ensuring the smooth running of operations and enabling the petroleum right holders to carry on their efforts for producing hydrocarbon reserves in the lease areas.
Missa Keswal field was discovered by OGDCL in 1991 by drilling Missa Keswal-1 well, which resulted in the commercial discovery of oil and gas. On December 28, 1994, the government granted a development and production lease (D&PL) for the Missa Keswal field in Rawalpindi district, Punjab, for a period of 20 years effective April 11, 1994 in accordance with the Pakistan Petroleum (Exploration and Production) Rules 1986.
On its expiry, the lease was extended and renewed till April 10, 2022. This is in accordance with Rule 32 of the Rules 1986, as also placed at Annex-11 of the summary.
The lease can be granted for an initial period of 25 years. On expiry of the initial period, the government may renew the lease for a period not exceeding five years subject to the continuation of commercial production.
In the instant case, OGDCL had availed 28 years (25 years initial period plus three years’ renewal) out of the 30-year period. According to the rules, the lease shall be for the period for which application has been filed but not exceeding 25 years in respect of the onshore areas of Pakistan and up to 30 years in respect of the offshore areas.
“Upon application from the holder, the government may renew the lease for a period not exceeding five years, if commercial production is continuing at the time of the application,” the Petroleum Division explained.
It further said that in order to complete the 30-year period and to continue commercial production, OGDCL had requested for the grant of a two-year extension in the renewal, effective April 11, 2022.
Currently, the field is producing 76.16 barrels of oil per day (bpd) and 0.16 million standard cubic feet of gas per day (mmcfd). The remaining recoverable reserves of the lease are estimated at 0.087 million barrels of oil and 0.216 billion cubic feet of gas. Keeping in view the remaining reserves, the field is expected to produce commercially till June 2025.
The renewal request for the Missa Keswal D&PL has been reviewed thoroughly by taking into consideration the remaining recoverable reserves. All other terms and conditions of the existing D&PL and the lease deed will remain applicable.
The ECC of the cabinet considered a summary submitted by the Petroleum Division regarding the “Grant of two years’ extension in renewal in Missa Keswal Development and Production Lease covering an area of 23.435 square km in Rawalpindi district, Punjab” and approved the proposal.
Published in The Express Tribune, February 16th, 2023.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
1725612926-0/Tribune-Pic-(8)1725612926-0-165x106.webp "article")
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ