Pakistan Petroleum Limited (PPL), an oil and gas exploration firm, has received approval for a Development and Production Lease (D&PL) over the Sui Gas Field for 10 years.
The E&P, a key supplier of natural gas in the country, shared the development in a notice to the Pakistan Stock Exchange (PSX) on Monday.
“We are pleased to disclose that the competent authority has approved a grant of D&PL over the Sui Gas Field to the company (100% Working Interest), covering an area of 455.80 sq. km, for a period of 10 years, effective from 1st June 2015 to 31st May 2025, in accordance with the Pakistan Onshore Petroleum (Exploration & Production) Rules, 2013,” read the notice.
It is pertinent to mention that the Sui Gas Field, located in Dera Bugti, Balochistan, hosts the country’s largest gas compressor station and purification plant.
Despite diminishing reserves over time, Sui Gas Field remains one of the largest natural gas producing fields in Pakistan.
Meanwhile, PPL on Monday informed that the original Sui Mining Lease had expired in 2015 after completion of 60 years and the company had submitted an application to Director General Petroleum Concessions (DGPC) for the grant of a D&PL over Sui Field under rule 30(A) of the rules.
“The total liability, as of 30th September 2024, on account of lease extension bonus, production bonus and social welfare/training obligations is Rs52.5 billion. This liability along with the obligations for the future period will be paid up till May 2025 as per the payment schedule approved by the Economic Coordination Committee (ECC),” it shared.
PPL informed that under the rules, the D&PL is eligible for extension and given the economics and commercial production from the Sui Field, the company plans to pursue an extension of the lease period per the rules.
The “company will now enter into the D&PL and Petroleum Concession Agreement (PCA) enabling it to discharge its financial obligations as approved by the federal government and seek further extensions of the D&PL in accordance with the rules”.
Last month, the E&P announced the commencement of hydrocarbon production from a new development well, Adhi South-9 well, located in the Pothwar region, Punjab.
As per the company’s latest financial results, PPL saw its profit-after-tax (PAT) drop nearly 24% to clock in at Rs22.69 billion for the quarter ended September 30, 2024.
The E&P also approved an interim cash dividend of Rs2 per share i.e. 20% on ordinary shares and Rs2 per share i.e. 20% on convertible preference shares, for the year ending 30th June 2025.
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