ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has directed Oil and Gas Development Company (OGDCL) to grant two-year extension in renewal in Missa Keswal Development and Production Lease (D&PL) within a month.
According to Petroleum Division, Pakistan was facing challenges in meeting ever-growing energy needs due to expanding population, natural depletion of major oil/ gas fields, increase in demand and dearth of new big discoveries and economic growth, adding that increasing exploration and development activities were essential to overcome the challenges.
The activities are critical for the growth of Pakistan’s oil and gas industry and for a long-term energy security. The Government was taking various measures, including extension and renewal of leases as well as to ensure the smooth running of operations and to enable the petroleum right-holders to carry on their efforts for producing hydrocarbon reserves in the lease areas.
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Missa Keswal Field was discovered by OGDCL in 1991 by drilling Missa Keswal-1 well, which resulted in commercial discovery of oil and gas. On December 28, 1994, Government granted a Development & Production Lease (D&PL) over Missa Keswal field covering an area of 23. 43sq.kms in district Rawalpindi, Punjab, for a period of twenty years - from April 11, 1994 in accordance with Pakistan Petroleum (Exploration & Production) Rules, 1986. On expiry of lease, it was extended and renewed till April 10, 2022.
In accordance with Rule-32 of the Rules, 1986, lease can be granted for initial period of twenty-five years. On expiry of the initial period, Government may renew the lease for a period not exceeding five years, subject to continuation of commercial production. In this case, M/s OGDCL had availed 25 years (25 initial periods + 03 years’ renewal) out of thirty years.
The sources explained that the lease shall be for the period for which application has been made but not exceeding 25 years in respect of the on-shore areas of Pakistan and up to thirty years in respect of the offshore areas. Upon application from the holder, the Government may renew the lease for a period, not exceeding five years, if commercial production is continuing at the time of the application.
Petroleum Division has noted the ECC in order to complete the thirty years’ period, and to continue commercial production, OGDCL has requested for grant of two years’ extension in renewal from April 11, 2022. Currently, the field is producing at a rate of 76.16 Barrels of Oil per Day (BOPD) and 0.16 million Standard Cubic Feet per Day (MIVISOFD) gas. Remaining recoverable reserves of the said lease are 0.087 million US barrels of oil and 0.216 Billion Cubic Feet (BCE) gas. Keeping in view the remaining reserves, the field was expected to produce commercially till June, 2025.
The sources said, renewal request of Missa Keswal D&PL has been reviewed thoroughly by taking into consideration the remaining recoverable reserves and economic evaluation. Since the field is producing commercially; therefore, Petroleum Division recommended two years extension in renewal from April 11, 2022 in Missa Keswal D&PL under Rule32 of the Rules, 1986 subject to the following conditions: (i) M/s OGDCL shall discharge all obligations in accordance with the Rules within thirty days from issuance of this office letter; and (ii) All other terms and conditions of existing Missa Keswal D&P Lease & Lease Deed shall remain applicable.
Copyright Business Recorder, 2023
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