The Pakistan Petroleum (Exploration and Production) Rules of 1986 permit the Petroleum Division to approve DoC and FDP requests for exploration permits.
The Petroleum Division has been given authority by the federal government to approve development plans for exploration licences in order to speed up the approval procedure and increase oil and gas production activities, which will help to ensure long-term energy security.
Prior to to approve development plans for exploration licences, the Economic Coordination Committee (ECC) of the cabinet had to approve the Declarations of Commerciality (DoC) and Field Development Plans (FDP) of the holders of exploration licences.
Thanks to the ECC, the Petroleum Division can now quickly process the DoC and FDP. Sources claim that the Cabinet Committee on Energy gave the Petroleum Division’s request for changes to the rules its approval.
The Pakistan Petroleum (Exploration and Production) Rules of 1986 permit the Petroleum Division to approve DoC and FDP requests for exploration permits. During an ECC meeting on March 30, this request was made in an effort to expedite the approval procedure in order to boost oil and gas production.
The division expressed worries that Pakistan was having trouble meeting its constantly increasing energy needs as a result of its rising population, natural depletion of its major oil and gas fields, increased demand, paucity of brand-new major discoveries, and economic expansion.
It was further stated that expanding exploration and development efforts was crucial to overcoming the difficulties. The growth of Pakistan’s oil and gas industry and long-term energy security, according to the petroleum ministry, depend on quick exploration and production (E&P) activities.
In order to reverse the decline in crude oil and gas production, increase hydrocarbon output, and lessen reliance on imported energy, which had a negative impact on the balance of payments and trade, it was added that accelerated exploration and enhanced development work were absolutely crucial.
ECC was informed that the Petroleum Division was taking a number of actions, one of which involved fast-tracking DoC and FDP approvals for various exploration and development activities that were taking place.
The approval is granted to ensure the smooth running of development operations and to enable the petroleum rights holders to make efforts for exploring the hydrocarbon deposits.
The Petroleum Division noted that, in accordance with Rule 24 read with Rule 33(1) of the Pakistan Petroleum (Exploration and Production) Rules 1986, it had received an application from Mari Petroleum Company Limited (MPCL) requesting approval of the DoC and FDP for the discoveries of Hilal and Iqbal.
Both the Hilal and Iqbal discoveries had been deemed commercial based on volumetric estimates, initial performance, forecasts, and economic evaluation. The two discoveries have gas reserves totaling 21.03 billion cubic feet (bcf), according to MPCL‘s calculations.
The case had been carefully examined, taking into account the estimated reserves and economic evaluation of the fields, when the Petroleum Division informed the ECC. The DoC and FDP for Iqbal-1 with effect from May 9, 2022, and Hilal-1 with effect from April 15, 2022, were requested to be approved by the committee.
The ECC approved a summary titled “Declaration of Commerciality, Approval of Field Development Plan over Hilal and Iqbal Discoveries” that was submitted by the Petroleum Division. The cabinet committee discussed the request for additional well testing at the Ghazij-1 discovery during its meeting.
The Petroleum Division informed the ECC that a development and production lease was granted for Mari’s discovery to MPCL (then Mari Gas) under the Pakistan Petroleum (Exploration and Production) Rules 1986.
MPCL has made a new gas discovery in Marietta and requested extended well testing to assess the extent of reserves and evaluate the reservoir’s performance for commerciality. The Petroleum Division proposed a one-year extended well testing period with effect from the start of production, subject to MPCL submitting the DoC and FDP before the expiry of the period.
The Petroleum Division’s “Request for Extended Well Testing over Ghazij-1 Discovery” summary was approved by the ECC, and payment of the production bonus would account for the production obtained. The business must comply with all legal requirements, including those relating to social welfare, training, and rental obligations.