WASIM IQBAL

ISLAMABAD: The Ministry of Energy (Petroleum Division) has expressed its inability to provide real-time data on oil and gas to the provinces, subsequent to a request by Khyber Pakhtunkhwa (KP) and Sindh, on technical grounds, prompting the provinces to raise the matter in the Council of Common Interests (CCI) meeting scheduled to be held on Monday (tomorrow), sources revealed.

KPK and Sindh approached the federal government for access to real-time production data of oil and gas from well-heads and natural gas consumption in KP and Sindh with Sindh even suggesting that data be emailed to them and/or uploaded on the Ministry’s website.

Inter Provincial Coordination Committee (IPCC) held on October 9 decided that a proper mechanism for sharing data of oil and gas may be formulated with the provinces after holding consultative meetings with provincial representatives within one week. However the said meeting with the provinces has yet to be convened.

The committee also directed the Petroleum Division to ensure uploading the data relating to oil and gas on their website on a weekly basis and simultaneously emailing the same to the Secretary Energy of the provinces.

Both the provinces are arguing that during the past four years, the federal government has not been able to award blocks which is hampering oil and gas activities and resulting in billions of rupees of loss to the provincial governments in the form of royalty and gas development surcharge, etc.

Mohammad Raziuddin, CEO Khyber Pakhtunkhwa Oil & Gas Company Limited (KPOGCL) said that (i) not a single block has been offered for bidding since 2014 out of 35 pending blocks, (ii) the leases awarded before 2012 have also expired and are not being renewed. This accounts for loss of more than Rs 20 billion to the federal government in terms of royalties whereas KP has lost Rs 5.8 billion in one year as royalty due to lower production.

The two provinces proposed devolution of regulatory functions to the provinces in light of Article 172 (3) of the constitution. The Article states, “Subject to the existing commitments and obligations, mineral oil and natural gas within the Province or the territorial waters adjacent thereto shall vest jointly and equally in that Province and the Federal Government.”

The Sindh government has asked the federal government to stop collection of royalty on crude oil and gas, allow provinces to collect the same under their own laws.

In its arguments, the provincial governments refer to Article 161 (1) of the Constitution, which recognizes the ownership rights of the provinces over mineral oil and natural gas by transferring to them all the monies collected on account of royalty and federal excise duty; and further stipulates that the net proceeds of royalty and federal excise duty are not part of the Federal Consolidated Fund and shall be paid to the province in which the well head of oil and gas is located.