January 29, 2024 (MLN): The Council of Common Interests (CCI) on Monday approved the draft Tight Gas Exploration and Production Policy 2024, according to a press release issued by the Prime Minister's Office on the same day.

The policy contains details regarding tight gas prices, incentives to promote their acquisition and regulatory framework for their use, the statement added.

Tight gas refers to natural gas reservoirs that cannot be extracted by conventional methods and require higher than normal hydraulic pressure and expensive equipment and technology to drill a gas well.

The meeting was informed that according to a conservative estimate, there are more than 35 trillion cubic feet of tight gas reserves in the country.

On the recommendation of the Petroleum Division, the CCI also approved increasing the rate of sale of natural gas to third parties on a commercial basis from 10% to 35%, which will help in reducing the revolving gas debt.

During the meeting, amendments in the Petroleum Policy 2012 were presented for approval by the Petroleum Division.

The meeting was informed that at present 85% of crude oil and 25% of gas consumed in the country is imported, which incurs valuable foreign exchange which is a heavy burden on the national exchequer. Moreover, the existing reserves of oil and gas are rapidly decreasing.

Regarding the exploration of new reserves, the Petroleum Division has proposed necessary amendments in the Petroleum Policy 2012.

The council also nodded to the recommendation of the Petroleum Division that old or existing licenses and leases of petroleum exploration and production companies shall be used for the exploration of new oil and gas reserves. The decision of the Council of Common Interests will encourage companies to explore new gas reserves.

 Under this amendment, the petroleum and gas exploration companies will have the authority to work under the Petroleum Policy 2012 regarding the discovery of new oil and gas reserves on their existing old licenses. Existing companies will be encouraged to explore new gas reserves.

CCI also approved better wellhead prices for oil and gas exploration companies in Petroleum Zone (F)1. Zone (F) 1 includes the southern border areas of Khyber Pakhtunkhwa province and the western border areas of Balochistan where exploration for oil and gas reserves is a difficult and expensive process due to difficult roads and lack of facilities.

On the recommendation of the Petroleum Division, the council has decided to lease oil and gas reservoirs based on the economic life of the reservoir.

The 51st meeting of the council was held today in Islamabad under the chairmanship of Caretaker Prime Minister Anwarul Haq Kakar.

Copyright Mettis Link News

Posted on: 2024-01-29T23:22:15+05:00