Petroleum Policy: MoP misses deadline for submission of final draft
ARIF RANA
ISLAMABAD (June 15 2007): The Ministry of Petroleum (MoP) has missed the deadline of June 1, for submission of final draft of the Petroleum Policy 2007, to the federal cabinet for approval.
The ministry had presented the proposed draft to the oil and gas exploration and production (E&P) and service companies' representatives on May 15, at a workshop to seek their input before presenting it to the federal cabinet.
While winding-up discussion after a day-long consultative process, advisor to prime minister, Mukhtar Ahmed, and senior officials of the ministry had given the deadline of 15 days to finalise the draft and present it to the federal cabinet for its endorsement. The deadline expired on June 1, but the final draft is yet to be finalised.
E&P companies had given various suggestions, which the advisor and other senior officials of the ministry termed as valuable at the workshop. The private sector's E&P in particular raised objections to the new pre-qualification process. They also wanted review of some other proposals such as experience and irrationally higher fee for acquiring blocks. They also expressed concern over what they call unbridled powers recommended for Director General Petroleum Concession (DGPC) office in the proposed draft of the policy.
The proposed draft said the government intends to maximise the exploitation of the Pakistan's petroleum resources. This can only be achieved by matching the skills, experience and financial resources of the right companies to the specific requirements of a particular investment opportunity. Opportunities for investment exist in Pakistan that are suitable for all types of companies, ranging from the multinational super-majors and both international and domestic National Oil companies to small niche players and local Pakistani independents.
As part of the licensing system, DGPC will run a two-tier pre-qualification system, the first tier of which will be based on the technical competence of the applicant to act as operator (and/or contractor) or as a partner. The second tier concerns the financial strength of the applicant and its commitment to invest under the terms of a given contract.
The two-tier approach is to enable smaller local Pakistani companies to join consortia with other E&P companies in order to gain the necessary industry experience to allow them to expand their capacity to take on operating roles in the future. In such consortia, the nominated leading company must meet all necessary pre-qualification requirements.
DGPC will maintain a register of pre-qualified companies who will be eligible to participate in bidding for grant of petroleum rights in Pakistan. After the announcement of this policy, DGPC will seek pre-qualification of the interested companies through a press advertisement giving a period of ninety days to all interested companies to get become pre-qualified. In addition, any interested company can submit an application for pre-qualification at any time in accordance with the applicable rules, however operating companies must be pre-qualified prior to bidding. DGPC will accept or reject all pre-qualification applications within thirty days from date of close of initial pre-qualification period of ninety days or from the date of filing of any application with DGPC, as the case may be, unless such time is extended with the approval of the government.
E&P companies wants a liberal approach of the government offices for making oil and gas sector more open for business which their representatives claimed at the workshop was high investment intensive and risky.
Copyright Business Recorder, 2007