Oil and gas: Jurisdiction claim delays exploration in Balochistan

Province insists energy firms must take NOC before conducting surveys

ISLAMABAD:

The Balochistan government’s attempts to assert what it believes is its constitutional right over exploration of oil and gas in the province are resulting in frayed relations between Quetta and Islamabad and causing delay in drilling of wells by both local and foreign energy companies.

“The provincial government is insisting on the recognition of its constitutional right, by the Ministry of Petroleum and Natural Resources, to award licences to oil and gas exploration companies,” said a senior ministry official.

“The ball is in the court of the provincial government,” the ministry official said, adding State Minister for Petroleum Jam Kamal Khan was scheduled to hold discussions with Balochistan Chief Secretary Saifullah Chattha in the next few days.

Chattha has been appointed by Balochistan Chief Minister Abdul Malik Baloch as the focal person that will discuss and try to settle all matters relating to natural resources.

Meanwhile, both domestic and foreign oil and gas companies seeking to conduct exploration activities in the province have been facing delays after Quetta sent an order to all deputy commissioners (the top bureaucrats in every district), preventing them from allowing surveys by companies that do not have a no-objection certificate (NOC) from the provincial government.

Balochistan Home Secretary Akbar Hussain Durrani said the provincial government would extend cooperation to all energy companies that could present an NOC to the deputy commissioners.

However, some companies – both domestic and foreign – have found their applications for an NOC denied by Quetta and have approached the federal petroleum ministry in Islamabad for help. The matter became the subject of a marathon meeting between the Balochistan chief minister and the federal state minister for petroleum at the Balochistan House in Islamabad more than a month ago.

Managing directors of the federally-owned Oil and Gas Development Company (OGDC) and Pakistan Petroleum were also present, who told Abdul Malik Baloch about the difficulties being faced by their survey teams.

At the conclusion of the meeting, the matter appeared resolved, but within a couple of days, a few provincial officials refused to honour the commitments made by the chief minister, forcing Jam Kamal Khan to meet Baloch once again.

The chief minister assured the federal minister of his cooperation in resolving the dispute swiftly, but the matter drags on.

As a result, many energy companies, including OGDC, have been unable to begin work on new exploration projects in Balochistan. Despite more than a month of negotiations between Islamabad and Quetta, the two sides have not been able to reach an agreement thus far.

The dispute erupted several months ago when the provincial government noticed that the federal petroleum ministry was issuing oil and gas exploration licences in violation of the 18th Amendment to the Constitution, which gives dual jurisdiction over hydrocarbon blocks to Islamabad and the provinces.

“The Balochistan government demands that the federal ministry must consult it before allotting exploration blocks to energy companies,” Jan Buledi, Balochistan government’s spokesman told The Express Tribune a few weeks ago.

Published in The Express Tribune, June 3^rd, 2015.

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