Petroleum sector: Amalgamation of downstream, upstream functions on the cards

Assigning regulatory responsibility for upstream and downstream functions of the petroleum sector to Oil and Gas Regulatory Authority (OGRA) is to be proposed for consideration to the Council of Common Interests (CCI). Documents available with Business Recorder reveal that the Petroleum Division under the Federal Minister Ghulam Sarwar Khan with the assistance of the Finance Ministry is considering the amalgamation of upstream and downstream functions of the petroleum sector.
At present, upstream regulatory functions are being carried out by the Directorate General of Petroleum Concessions, Petroleum Division, while the downstream functions including midstream oil and gas business inclusive of storage, refining and marketing of petroleum products and transmission and distribution of liquefied natural gas (LNG), liquefied petroleum gas (LPG) and natural gas are being carried out by Ogra.
Petroleum Division received a summary from OGRA for CCI consideration, requesting transfer of upstream oil and gas regulation to OGRA as a centralized regulator to take care of the entire oil and gas sector from exploration and production to its sale.
On May 31, 2018, Finance Division conveyed to federal government that the multiplicity of regulators in the country is creating confusion hence the upstream sector''s functions may be delegated to OGRA by making necessary amendments in the OGRA Ordinance 2002.
Sources in Petroleum Division said that before submitting the summary for CCI consideration, the matter will be deliberated at length with all stakeholders. For this purpose, stakeholders'' consultative sessions will be held in each province. Since the matter under consideration falls within the purview of the CCI, the approval of CCI is necessary.
Sources said that Petroleum Division will discuss the matter informally at the CCI forum in order to ascertain if the CCI endorses the idea of a single regulator for upstream and downstream petroleum sector.
The gas sector reform programme was recommended by the World Bank; and a task-force chaired by former Prime Minister Shahid Khaqan Abbasi had concluded in deliberations with the provinces that an independent Pakistani Petroleum Exploration and Production Regulatory Authority (PPERA) would be tasked to oversee upstream oil and gas sector which is exploration, production and pricing of oil and gas at field gate.