New petroleum policy to ensure oil, gas self-sufficiency

ISLAMABAD (APP) - The new Petroleum Policy announced by the government early this year focusses on accelerating oil and gas exploration and production activities, besides making the country self sufficient in this vital sector within four years.
This new, but ambitious policy targets tapping the natural resources to ensure energy security and fulfil the future requirements of the country, it was officially learnt on Tuesday.
The country is currently producing 64,000 barrel of oil daily while the production of gas stands at 3.9 MMCF. Under the new policy, exploration work would be launched on over 250 blocks out of 350 to discover oil and gas, and for this purpose upto 100 new licenses would be issued.
Main thrust of the policy is to meet the challenges of the ever increasing energy demands, encouraging foreign direct investment and also promoting local participation in the sector.
The policy involves incentives for the local and foreign investors to make the country self sufficient in this sector within next fours years.
It also features efforts to utilise the experience of foreign companies to explore more oil and gas by working on maximum exploratory well.
Under the new policy, the investors would be offered higher prices up to four dollars per barrel as their share in exploration of crude oil to attract more investment in this sector.
Stringent criterion for prequalification of the exploration and production companies has been simplified.
Besides, the discount during extended well test phase has also been reduced from 15 pc to 10 pc to encourage the companies for early production.
The government would encourage the local investment into the energy sector and the investors would be required to enter into agreements with the foreign companies or engage a high calibre technical and management team capable to exploit hydrocarbon resources to its full potential.
Pakistan has huge oil and gas resources, but unfortunately these are not yet tapped. Special emphasis has been laid in the new policy to explore the resources.
The new policy has been prepared in consultation with all the stakeholders to make it more workable keeping in view the failure of the last policy of 2007 under which no new investment was made in the sector.
Emphasis would also be laid on importing LPG and completing two projects of LNG to enhance its availability for the consumers. The country would also invest in other countries in oil and gas sector. Pakistan Petroleum Limited has entered into a joint venture with a Yemeni company for undertaking work in Yemen at an estimated cost of US $ 17.5 million.
The government would encourage the setting up of second-hand refineries in the coastal areas of Balochistan with tax holiday of seven and half years. Many foreign investors are keen to invest in oil and gas sector.