The government has decided to constitute a Dispute Resolution Committee (DRC) under the chairmanship of petroleum minister to resolve disputes amongst stakeholders over the country's natural resources, well-placed sources in the ministry told Business Recorder.
Petroleum secretary, representative of defence Ministry and provincial secretaries for mines and minerals would be members of the committee, notification for which is yet to be issued, sources added.
The decision was taken by the economic co-ordination committee (ECC) of the cabinet in its meeting on June 14, on a summary of the petroleum ministry to grant Coal Bed Methane (CBM) exploration and production licence to any American company and deal with possible dispute between the federal and provincial governments in this regard.
Sources said Cathy Oil and Gas Limited (COGL), one of the American companies, had submitted a proposal for exploration and production of CBM and intends to first conduct reconnaissance survey covering an area of 40,000 square kilometres.
Company's experts would fly over entire Indus Basin (minus areas where coal licences had already been issued and areas of potential surface minable resources) and apply USA's BellGeospace technology with the US government's approval and would use USGS aircraft for this purpose.
Sources said the company had demanded exclusive rights for exploration and production of CBM in areas which are believed to have potential (as a result of the reconnaissance survey), adding the CBM would not be supplied in the local market being very expensive and would be used in their own petrochemical plants and sold at deregulated prices.
According to sources, the firm had set several conditions prior to make an investment: one of which was unified regulatory control over the exploration and production operations to avoid serious conflict of interest among coal mining, coal gasification, coal seam water production and CBM.
Sources further said the federal government had issued exclusive petroleum exploration and production rights to the E&P companies, which are not producing CBM, however, they may claim their legal rights on CBM in their licensed areas.
Secondly, the Sindh government has taken up the matter with the federal government, claiming that CBM is the property of provinces and it should be regulated by them rather than the centre.
The petroleum ministry, sources said, was of the view that CBM is hydrocarbon and covered under the definition of petroleum, which is the federal subject in accordance with the Constitution.
The ministry had proposed the provincial government would regulate CBM ensuring that (a) provincial governments will not grant rights to explore and produce CBM over areas already awarded by the federal government for petroleum exploration without the consent of respective companies on case to case basis; (b) CBM operations do not hinder petroleum exploration and production activities; and (c) the federal government would have the right to issue licences for exploration and production in the CBM-licensed areas.
It was also proposed that the E&P company needs to follow the procedure as given in the petroleum rules and exemptions or exclusivity can be granted to the company in any manifesto whatsoever and it would provide a level playing field to existing and new entrants.
Sources said the petroleum ministry had referred the matter to the law ministry for comments, which observed that, in case CBM being the by-product of coal and is not categorised as petroleum, the question of transfer of any power by the federal government to the Sindh government under article 146 (1) of the constitution would be free from doubt.
However, the law ministry agreed to the petroleum ministry's proposals but recommended that it would be appropriate to seek opinion of some experts of international repute on CBM as to whether or not the same is petroleum.
Sources said though the ECC had approved the proposal, the Sindh government might approach the highest level for revision of the decision.
Comments
Comments are closed.