Provinces to approach CCI to seek control of resources

Ministry of petroleum insists there cannot be two regulators.

ISLAMABAD: Provinces have rejected the draft of Petroleum Exploration and Production Policy 2011 and say they will take the issue to the Council of Common Interests (CCI) to seek regulatory control over oil and gas exploration and the industry, a provincial government official says.

The issue arose in a meeting held recently between the Ministry of Petroleum and Natural Resources and representatives of the four provinces.

“The policy is entirely against the spirit of 18th Constitutional Amendment,” said Zafar Iqbal, Energy Secretary of Khyber-Pakhtunkhwa. The policy was not acceptable to the four provinces because they say it was drafted without implementing the 18th Amendment, he said.

However, the petroleum ministry insists that the policy has been formulated in accordance with the 18th Amendment.

Additional Petroleum Secretary and ministry’s spokesman Naeem Malik told The Express Tribune that the provinces had not rejected the policy, but that they simply had reservations about it.

“Actually the provinces were demanding total regulatory control over oil and gas exploration and the industry. How can there be two regulators at a time, there should be only one which is the petroleum ministry,” he stressed.

According to Malik, the ministry has prepared the policy after taking legal and constitutional opinion from eminent lawyer Abdul Hafeez Pirzada and the law ministry. Opinion of national and international oil and gas exploration companies was also sought and incorporated into the policy draft, he said.

“The policy has been drafted in the light of 18th Amendment that guarantees 50 per cent share of revenue from the oil and gas industry to the central government.” The policy also guaranteed royalty and gas development surcharge for provinces but they were demanding much more than that, Malik said.

In a meeting last month, the National Assembly standing committee on petroleum and natural resources came up with the view that the Petroleum Policy 2011 would only facilitate the private sector.

Published in The Express Tribune, December 23^rd, 2011.