ISLAMABAD: The government on Monday announced Petroleum Exploration and Production Policy 2012, which the Petroleum Advisor said, would help achieve maximum self-sufficiency in energy and promote exploration and production activities by providing competitive incentives to the investors.

Advisor to the Prime Minister on Petroleum and Natural Resources Dr Asim Hussain announced the second petroleum policy of the current government as the first one was formulated in 2009.

Addressing newsmen, Dr Asim Hussain said the new policy was essential keeping in view the internationally increased oil prices as the comparatively lower prices in Pakistan were hindering investment in the country.

Under the new policy, the government has set Well Head Gas Price in Zone-III at $6 per MMBTU, $6.3 in Zone-II and $6.6 in Zone-I, he added.

He said the Zone-I comprised west Balochistan, Pashin, and Potowar basins, Zone-II consisted of Kirthar, east Balochistan, Punjab Platform and Suleman basins while the Lower Indus Basin fell in Zone-III.

Moreover, the Advisor said the new Petroleum Policy provided a comprehensive pricing mechanism for Zone O that had been set at $7 per MMBtu for Shallow, $8 for Deep and $9 for Ultradeep exploration.

He said the policy maintained a system based upon two different types of agreements to obtain E&P rights in Pakistan - Petroleum Concession Agreement for onshore operations and Production Sharing Agreement for offshore operations.

As per policy, the initial term of production and exploration lease will be up to 25 years in offshore area with one possible renewal of up to five years, he added.

Dr Asim said that the new policy would also address the issues raised after the 18th Amendment that had increased the provinces share in natural resources. Ninety percent of the gas produce would be purchased by the government while rest 10pc would go to any third party.

He said under this policy, the role of Directorate General of Petroleum Concessions would be reorganized that would decide the maters of grants, regulations and petroleum concessions, besides taking up the issue pertaining to inter-provincial importance and oversee development plans and work progress of E&P companies.

Moreover, the directorate will also address operational issues faced by the company in various concessions and assist for development and propose measures to facilitate companies, he added.

The Advisor was optimistic about the direct foreign investment in Pakistan consequent to the new Petroleum Policy and mentioned to the interests shown by a Qatar-based firm and others.

He said that the government was organizing road-shows to attract investors in Pakistan for TAPI project for what the companies of Singapore, New York, London and Bangladesh have expressed interest.

He said the Petroleum Policy 2012 ensured spending of 10 percent of royalty for welfare of local community, adding that the government was expected to increase the number of gas fields to 500 to help improve gas supply to domestic as well as industrial sectors.

According to the policy, $30,000 should be spent per year during exploration stage and up to $700,000 during commercial production phase and that the social welfare projects must be agreed with local community.

He reiterated the government's policy to tighten the CNG usage. He said that burning gas is the worst use of the natural resources and exemplified the gas producing countries like Qatar where there is no concept of piped gas.

The Advisor said that the government was also in negotiation with India that had recently allowed import of 200MMCF LNG through Lahore border.

He said that the steps being taken by the government would make the country capable to export gas. He said that the situation in the upcoming winter would be better; however he did not rule out gas load-shedding.