Khyber Pakhtunkhwa MPAs urge government to raise royalty on gas to 15 percent

Members Provincial Assembly (MPAs) from Khyber Pakhtunkhwa (KP) have urged government to raise royalty on natural gas from 12.5 per cent to 15 per cent. "Our demand is to raise royalty rate on natural gas to 15 per cent and we will hold a meeting with Prime Minister to this effect," MPAs from KP said in a meeting of sub-committee of the Senate Standing Committee on Petroleum and Natural Resources held here on Thursday with Senator Abbas Khan in the chair.
The representatives of oil and gas exploration companies operating in Karak, Kohat and Hangu also attended the meeting. KP lawmakers from Kohat, Hangu and Karak raised serious concern over low rate of land rent being paid by oil and gas exploration companies, employment of local people, investment on welfare and gas provision to the villages situated close to drilling wells.
Managing Director (MD) OGDCL Naeem Malik said that there had been problems to invest on the welfare schemes of the local people. "We need to develop consensus among MPAs, MNAs, councilors and local community to launch welfare schemes," Malik said, adding that due to difference between stakeholders, welfare schemes are being delayed.
Senator Pervez Rasheed raised serious concerns over non investment by exploration companies on the welfare of people. He said that local people were protesting and exploration activities had become a challenge due to poor response of the companies to the problems of local people. Rasheed said that amount earmarked for social welfare should be linked in percentage with fluctuations in international oil prices. He maintained that it should be made mandatory for exploration companies to hire the local people.
MD OGDCL Naeem Malik said that there was no provision in agreement signed before 1994 to invest on the welfare of the people. Exploration companies were bound to pay 12.5 percent royalty that was still being paid. "Federal government provides royalty collection to the provinces after deducting administrative charges and provinces should have spent on the welfare of local people," he added. "Now we have decided to invest one percent of our net profit on the welfare of people," he said and requested KP lawmakers to come up with sustainable development schemes for long term benefits.
Naeem Malik said that OGDCL management had made it mandatory to hire local people subject to qualification and experience. DG Petroleum Concession Sher Khan said that the country had been divided in four zones relating to exploration activities and it was binding for exploration companies to invest at least 30,000 dollars per annum before commercial discovery on the welfare of the people.
MPA Mian Nisar Gul Kakhakhel said that people of the districts Kohat, Hangu and Karak had been ignored for a long time and therefore were protesting for their rights. He said that OGDCL had suffered a loss of Rs 30 million due to closure of field for two days.
He said that MOL Company was working for the last eight years but had not hired workforce from local population and therefore people had turned against it. "MOL has given guns into the hands of the local people by hiring security guards," he said. Gul alleged that MOL had hired contractor from Karachi to appoint drivers in the company. Gul further alleged that people were being paid low rent and therefore they had lodged strong protest.
MOL representative said that they were paying rent according to the policy of provincial government. He said that MOL paid annual rent of Rs 20,000 per acre in first year and Rs 8000 per year rent from the year onward. He further said that 31 per cent people were hired from local area.
General Manager OGDCL Mureed Hussain said that rent had recently been raised to Rs 3600 per acre in consultation with local people. "We hold direct negotiations with land owners," he added. The sub committee directed companies to submit details about their employees. Petroleum Ministry DG Gas Azam assured to move a summary to Prime Minister for a directive to initiate schemes of gas provision in 18 villages of Karak, Kohat and Hangu. Deputy Managing Director (DMD) Imdad Hussain said that total theft of gas was one billion cubic feet per day in KP due to 6000 direct connections.