Petroleum policy likely to be announced today

Petroleum Ministry is expected to notify new Petroleum Policy 2009 today (Friday) as members of sub-committee of Economic Co-ordination Committee (ECC) of the cabinet have signed the draft of the policy, a prerequisite prior to the issuance of the notification.
Sources revealed to Business Recorder on Thursday that government has decided to involve members of the National Assembly to utilise the money from "Production Bonus Fund" (PBF) on social welfare projects in the contract areas of oil and gas exploration activities in the new policy. The sub- committee of ECC under the chairmanship of advisor to Prime Minister on Petroleum and Natural Resources Dr Asim Hussain was formed to resolve the issue of utilising the production bonus fund.
According to new Petroleum Policy, oil and gas exploration companies will be bound to give 50 percent non technical jobs to people living in the contract areas of oil and gas exploration activities. Sources were of the view that this step would help generate employment in the contract areas.
In the new policy, these committees chaired by MNAs will be formed in the oil and gas exploration areas to distribute the fund for social welfare projects of the local people. ECC had approved the new Petroleum Policy 2009 in its meeting held on January 10, and also formed a sub-committee to resolve the issue of utilisation of Production Bonus Fund.
Sources said that in ECC meeting held on January 10, a proposal was considered that a committee would be headed by district nazims to utilise PBF but due to resistance from members of ECC, a sub committee was formed to resolve the issue. The sub-committee has taken the decision that committees will be headed by MNAs. Government will transfer funds from Production bonus fund to the committees that would utilise it on the social welfare projects of the people living in the contract areas of exploration.
Pakistan Petroleum Exploration and Production Association (PPEPA) had supported extending PBF for social welfare projects. The government had earlier proposed distribution of cash to the local people from PBF. However, this was opposed by all stakeholders, who raised fears of embezzlement. The oil and gas exploration companies would also contribute to the PBF and suggested that the projects be named after their company.
The Petroleum Policy envisages a raise in production bonus in contract areas of oil and gas explorations from $500,000 to $600,000 within 90 days of start of commercial production, $1,000,000 to $1,200,000 upon reaching 60 million barrels of oil equivalent (MBOE), $1,500,000 to $2,000,000 upon reaching 120 MBOE, $3,000,000 to $5,000,000 upon reaching 160 MBOE and $5,000,000 to $7,000,000 upon reaching 200 MBOE.