ISLAMABAD – The government is trying to assure perturbed foreign petroleum exploration and production companies that after the implementation of the 18th amendment from July 1, 2011, all contractual obligations would be protected in accordance with the law.
An official source said that the foreign petroleum companies operating in the country were demanding clarification on various important issues after the passage of the 18th amendment, as provincial governments had to be taken on board for a decision on various important issues. The government was likely to seek permission from Council of Common Interests (CCI) for interim arrangements to address their concerns.
Under the 18th amendment, a new clause 172 (3), was introduced in the constitution whereby mineral oil and natural gas within any province or its territorial waters have been vested jointly and equally with that province and the federal government. This means that federal government alone could neither formulate any policy nor take any decision without the consent of the respective provincial government, he said. The government had decided to set up a federal body along the lines of Indus River System Authority to deal with issues relating with mineral wealth but the delay in the setting up the body was hindering the operations of the foreign companies.
The independent body would have provincial representatives as members to play the role of mediator between provinces and the federation.
Nationalist parties are pressurising the provincial government to set up their own oil and exploration companies in order to take benefit of the mineral wealth and provide more jobs to the local population in the state owned and foreign companies. They are also demanding a greater share in production royalties.
To counter the demands of nationalist parties, the federal government had already directed the provinces to set up their respective energy ministries, source said. The Association of the Pakistan Petroleum Exploration and Production Companies Association (PPEPCA) met with the former petroleum minister and present Minister for Privatisation with additional charge of Ministry of Water and Power Syed Naveed Qamar on Thursday, who quite blatantly told them that the provinces would not be treated as colonies and they would be partners in all future transactions.
However, he assured them that all the contractual obligations made with foreign petroleum exploration and productions companies would be honoured in accordance with the law. He stressed that before the establishment of a new body and mechanism to replace the existing arrangements for future transactions, permission from Council of Common Interests (CCI) would be taken in its next meeting for placing interim arrangements within a transparent timeline.
