ISLAMABAD: With gas shortages rising, the government has decided to tighten the noose around delinquent petroleum exploration and production companies for failing to meet their targets for oil and gas discoveries.
A senior petroleum ministry official told Dawn that companies which failed to complete formalities and start exploration activities within the committed timeframe were now being served notices to remedy their breach of agreement at the earliest or face the possible revocation of their licences.
The official said the ministry was also looking into how some companies were able to hoodwink the government in securing exploration licences without any past experience or expertise with oil and gas exploration.
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A senior official said the Directorate General of Petroleum Concessions has issued notices to two companies — Al-Haj Enterprises and Tallahassee Resources of Canada — which had obtained exploration licences early last year but failed to start exploration or complete arrangements for doing so.
In a notice served on Al-Haj Enterprises, the petroleum ministry said the company had executed Exploration Licence for Potwar South (Block 3271-6) and Baska North Block in KPK in February of last year with a work commitment of 701 and 759 work units, respectively, but had committed three major breaches of the agreement.
The notice said the company did not submit the detailed credentials of its technical team for scrutiny. The company also did not hold technical and operating committee meetings (TCM/OCM) for the block “which is a sheer violation of article 4.1 of Joint Operating Agreement”.
The notice said the company also failed to offer a 2.5 per cent working interest to the government immediately after signing the petroleum concession agreement and obtaining exploration licences as required under the Pakistan Onshore Petroleum Rules 2013. “Therefore, the company has been found in material breach of the terms of agreement,” the notice said.
The Al-Haj group has a fleet of thousands of tankers, transporting oil products for leading oil firms in the country and in Afghanistan, but has no experience in oil and gas exploration.
The notice to Tallahassee Resources also found the Canadian firm in material breach of the terms of agreement for not opening a registered branch office in Pakistan within 90 days, as required under law. The company was also given a licence in August 2014, with work commitments of 307 work units for the Karak North Block in Khyber Pakhtunkhwa.
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