Ministry delays action against defaulting oil, gas explorers

Companies failed to meet minimum work commitment.

ISLAMABAD: The Ministry of Petroleum and Natural Resources has delayed action against oil and gas companies which have failed to meet minimum work commitment despite warning them about cancellation of exploration licences and disqualification.

According to documents, the regulator of upstream oil and gas industry, Petroleum Concession Director General Sher Khan, served show-cause notices in September and October 2011 on oil and gas firms including Nativus Resources and Paige Private Limited.

These companies had failed to meet minimum work commitment and other obligations like social welfare, training and rent.

The petroleum concession director general threatened to cancel licences of the firms in one month after the issuance of notices.

“But he has not yet taken any action against the defaulting firms,” an official of the petroleum ministry said, adding Paige and Nativus were to pay Rs10 million on account of rent, $204,000 for social welfare and $46,478 for training.

Despite attempts to reach the regulator, he was not available for comments.

According to the documents, a joint venture of Nativus Resources and RDC International was granted petroleum exploration licence for Huramzai field on April 27, 2005, which remained valid up to October 26, 2007. Thereafter, no further extension was granted.

The same joint venture was also granted Ladgasht petroleum exploration licence on April 27, 2005 and the licence remained valid up to April 26, 2008. No further extension was given. Earlier in April 2002, the joint venture got Lugai petroleum exploration licence, which stood valid up to October 10, 2009.

In all these licences, Nativus was required to meet outstanding minimum work commitment along with additional seismic survey within the extension period and all other obligations as stipulated in the exploration licence.

However, despite lapse of a considerable time, the company could not be able to fulfil the commitment and other obligations like social welfare, training, rent, etc.

Paige also failed to meet minimum commitment for Multani and Murgha Faqirzai petroleum exploration licences. The licences were granted on April 24, 2003 and September 6, 1999 respectively, the documents said.

Published in The Express Tribune, May 2^nd, 2012.