Daily Times

The Senate Standing Committee on Petroleum heard in disbelief that the auction of 24 oil and gas exploration blocks had been on hold for more than six months for non-issue of a no-objection certificate (NOC) from the defence ministry. The bottleneck defies the government’s commitment to scale up the ‘ease of doing business’ indicators and several of the measures taken up by the government that have been acknowledged by international ranking bodies. In a hearing before the Senate Standing Committee on Petroleum, Petroleum Secretary Asad Hayauddin said the auction of fuel exploration blocks could not be carried out due to the awaiting NOC while his predecessor Sikandar Hayat Raja had also narrated the same reason for the delayed auction of 30 to 40 blocks in June last. The defence ministry, if it has any concern about the work, should convey to the petroleum ministry to be addressed or shelved forever.

The bureaucratic bottlenecks have often been blamed for poor economic growth and economic meltdown. The government needs to come up with a time-bound process for such clearances. The better way forward should be to mark the potential blocks to be put on auction for exploration and get their file work ready so that fresh blocks could be offered at regular intervals to local and international companies for exploration. If some ministries have concerns over the involvement of foreign companies in a sensitive area, local exploration companies could be a better choice. The work must not lose its pace. Pakistan’s mines and minerals deposits have yet to be tapped to their full potential thanks to tough business rules, fragile security and order (in some areas) and courts’ intervention. The departments concerned are not trained to get a deal with investor companies, and for that reason, the agreements progressing to the stages of execution and culmination have failed to reach the grass roots level.

The Petroleum Policy of 2012 is a comprehensive document, which if implemented as per its text, can ease out such bottlenecks. The policy also details the rights and shares of provinces under Article 172(3) of the Constitution, and the details of concession agreement and corporate social responsibility activities of the companies under the policy. Pakistan needs to see a flurry of activity in the gas and petroleum sector given the growing needs for fuel consumption and ever rising import bills. Right now, the oil and gas production is 89,030 barrels per day and 3,935 million cubic feet per day. The removal of bottlenecks can impact the exploration, hence production. *