ISLAMABAD: The petroleum exploration and development companies on Thursday asked the government to improve the working environment for oil and gas exploration activities by addressing issues relating to security, revocation of their existing blocks and procurement rules.

At a round-table meeting with chief executives of the local and foreign exploration companies, a government team led by Minister for Energy Omar Ayub Khan, was also suggested to prioritise offering offshore blocks for auction in the next bidding round to attract more international exploration firms.

The representatives of the Mari Petroleum Company suggested to the government to prioritise the offshore blocks in the upcoming bidding round as they had the potential of large oil and gas reserves and offered to coordinate with foreign firms as joint venture partners to facilitate foreign investment.

Some of the private companies also raised the issues of security in their operations and suggested the government and its agencies were well aware of the areas where exploration activities are handicapped by the local environment. In such cases, the government should not only provide security coverage but also be very considerate in revocation of existing blocks.

The companies also expressed concerns over pricing structure making local oil and gas production uncompetitive while public sectors companies showed their limitation caused by the public procurement rules and policies hampering fair competition in acquisition of goods and services needed in the exploration and production sector.

The CEOs of Dewan Group, Orient Petroleum, Oil and Gas Development Company, Pakistan Petroleum Ltd, Mari Petroleum, Petroleum Exploration Company and PGiNG, a polish firm, attended the meeting.

The management of Mari Petroleum believed that Pakistan could fetch better results of oil and gas through offshore blocks that would help to overcome gas shortages and meet oil requirements of the country as onshore areas had smaller deposits that did not attract big companies.

Pakistani state companies along with foreign firms ENI and Exxonmobil had made efforts in an offshore block but remained unsuccessful. Officials of Pakistani companies, however, were of the view previous attempts had helped collect a lot of data that would be useful in future efforts.

New bidding rounds

Now, Mari Petroleum has come up with a plan that the government should prioritise the offshore blocks in the upcoming bidding round which means that the company was ready to make an effort in offshore drilling in the country. The next round may be convened by November-December this year.

An official statement said the meeting discussed the new bidding rounds of oil and gas blocks including offshore blocks, revocation of existing blocks and amendment in Public Procurement Regulatory Authority (PPRA) Rules for oil and gas companies in the public sector like OGDCL, PPL and Mari Petroleum.

Officials said that exploration companies also took up the matter of revocation of existing blocks. The energy minister assured them that a separate meeting would be held to address the concerns of the oil and gas exploration companies in this regard.

The government wants to reduce the time period for any procurement by state-run companies to make them competitive in the oil and gas market, the minister assured. The government has already made amendments in PPRA rules for the Pakistan LNG Ltd (PLL) to reduce the time period for LNG procurement. The government also wants to introduce a similar mechanism for the other oil and gas exploration companies.

Sources said that the Petroleum Division had sought comments from companies in a bid to table a summary before the competent forum to seek formal approval for amendment in PPRA rules.

Published in Dawn, April 16th, 2021