Advisor to the Prime Minister on Petroleum and Natural Resources Dr Asim Hussain told the Senate on Friday that the provincial government and the exploration company at Reko Diq project were in litigation and that the company had claimed $ 5 billion in damages.
The Senate was also told that CNG stations would be phased out of the system in the next few years due to imminent shortage of gas.
“The provincial government had been asked to resolve the matter or claim liability of payment of claimed money by the company,” said Dr Asim while replying to queries in the question hour. He added that the contract for exploration of natural resources at Reko Diq project was awarded long before the incumbent government took charge of affairs.
“The issue could be taken up at the Council of Common Interests (CCI), Inter-Provincial Coordination (IPC) or any other platform for a cordial settlement of the dispute under the directions of the House,” he assured the Upper House of the Parliament.
However, his assurance and explanation could not satisfy Senators across the isles including the Leader of the Opposition, who suggested the Advisor to take the issue at CCI, IPC or any other platform for peaceful settlement. Ishaq Dar also advocated that the government should not take the matter leniently and should hold responsible the relevant persons for awarding contract at cheaper rates and with not so good terms and conditions. Senator Robina Irfan also questioned the unworkable and irrational terms of engagement included in the agreement, terming them against the national interests.
However, the advisor maintained that after the devolution and the 18th amendment, exploration and ownership rights of mines and minerals had gone to provinces and federal government had no share in the provincially-run projects.
“The provincial government of Balochistan has been asked to settle the issue amicably or claim liabilities claimed by the company as it has moved to international court of arbitration” he observed. “Presently, no proposal is under consideration of the government to grant permission for establishment of more CNG stations due to ban on issuance of new licenses,” he said, adding that occurrences and showings of gold and silver had been reported from various parts of the country including Balochistan, Gilgit-Baltistan and Khyber Pakhtunkhwa. However the reserves of these occurrences and showings had not been confirmed except for the Saindak and Reko Diq deposits in Chagi district of Balochistan.
He said that Saindak Copper-Gold Project was the only project in the country which was producing gold and silver as a by-product in a nominal quantity and added that Saindak and Reko Diq deposits had 1339.25 tons of gold and 74,707 tons of silver.
He observed that around 85 percent of the country’s demand of oil was being met through imports; therefore, the ex-depot sale prices of petroleum product were linked with international (Arabian Gulf) market prices of petroleum products published in Platts Oilgram. “As such the prices of petroleum products are increased or decreased based on price trends in international market,” he informed the House saying that the government had deregulated the prices of Petroleum Products (Petrol, HOBC, LDO and Jet Fuels) and their prices were linked with actual import prices of PSO.
To another question, Dr Asim said that the Oil and Gas Development Company Limited (OGDCL) was not issuing any term finance certificate (TFC) to raise funds to tackle circular debt. Efforts to resolve the circular debt have been ongoing for quite some time.
In this regard, water and power ministry submitted a summery to Economic Coordination Committee (ECC) proposing partial resolution of power sector circular debt by issuance of TFC. He said that the OGDCL would subscribe to these TFC to be floated by PEPCO or the Power Holding (Private) Limited with an amount worth Rs 82 billion.
In response to another question, the advisor said that SNGP and SSGCL collected an amount of Rs 220.17 billion under the head of gas charges from July 1, 2011, to February 29, 2012. However, the advisor could not satisfy senators over their questions about imposition and lifting ban on setting up new CNG stations for a short time despite acute shortage of gas in the country. The advisor said that permission for new CNG stations could only be granted by Oil and Gas Regulatory Authority or PM; so, senators could write to PM for relaxation of rules for the permission of new CNG stations in their constituencies.
