Salient features of petroleum exploration and production policy2012. pakistan......
1. Salient features of the new petroleum exploration and production
policy2012
INTRODUCTION
Pakistan operates a concession type contract for onshore
exploration whereas offshore exploration is governed by a
production sharing regime. Pakistan has vast sedimentary area of
over 800,000 square kilometers of which over 70% is yet to be
explored. The success ratio of oil and gas discoveries is one of the
best in the world as is evident from the success ratio of 1: 3.22
discoveryrates.Pakistan has estimated recoverable reserves of 27
million barrels, according to the last Economic Survey.According to
latest Pakistan Petroleum Institute (PPIS) statistics. That comes
months after the highest level of 84,650 bpd was achieved. Average
oil production was at 81,000 bpd in 2013, up 13% over the previous
year with most of the increase coming from the wells located in
Khyber-Pakthunkhwa.If the work continues like it is right now, then
PAKISTAN should be able to achieve the target of 130,000 to
140,000 bpd in a short time.Around 76 wells were drilled last year
alone. We have never seen work on so many wells being done in
one year.
SALIENT FEATURES
To attract foreign investment a better gas price had been offered
which includes production price of
$6 per MMBTU for Zone-III (West Balochistan, Pishin and Potowar),
$6.3 per MMBTU for Zone-II (Kirthar, East Balochistan, Punjab and
Suleman Basin) and $6.6 per MMBTU for Zone-I (Lower Indus Basin).
Likewise, an attractive price of $7 per MMBTU has been offered for
offshore shallow, $8 per MMBTU for offshore deep and $9 per
MMBTU for offshore ultra-deep zone. The existing policy offered
$3.13 MMBTU for Zone-III, $3.37 per MMBTU for Zone-II, $3.6 per
MMBTU for Zone-I and $3.836 per MMBTU for deep and ultra-deep
offshore exploration. On first three discoveries, the companies
would be offered a one dollar per MMBTU higher price to encourage
them to speed up development programs.
2. The exploration licence period has been reduced from 9 years to 7
years and the appraisal renewal period has been reduced from two
years to one year.
The windfall levy had been reduced from 50 to 40 per cent and that
would offer better return to companies and the levy would be
equally shared by federal and provincial governments. To
determine the production price, the base price of crude oil and
condensate for windfall levy has been increased from $30 per barrel
to $40 per barrel which will rise each year by $0.5/barrel while the
gas pricing ceiling has been increased to $110 per barrel from $100
per barrel. The exploration and production companies will be
allowed to sell their gas at the mouth of gas field and gas utilities
will bear the pipeline cost
Royalty will be payable at the rate of 12.5 per cent of the value of
petroleum at the field gate. It will be paid in cash or kind to the
provinces to the extent of their share of liquid and gaseous
hydrocarbons
for the first time, 10 per cent royalty will be utilised in the
administrative district where oil and gas is produced for
infrastructure development. Production bonuses will be spent on
social welfare projects in and around the respective contract areas,
according to the guidelines to be issued by the government of the
province.
NAME: GHULAM ALI
