As the Sindh government is mounting pressure to get four dormant gas fields from the Oil and Gas Development Company Limited (OGDC), the latter has refused to accept the demand, and has asked the Sindh government to pay wellhead price of hydrocarbon resources as per petroleum concession (PC) agreement in light of the decision of Economic Co-ordination Committee of the Cabinet," Business Recorder has learnt.
According to sources, the OGDC in a meeting held on Friday is said to have informed Sindh Information Minister Shazia Mari and Finance Minister Murad Ali Shah that it would "not make any investment to develop the dormant gas fields".
The ECC in its meeting held in last week of January 2011 had decided that the gas from Nur, Bagla, Jakhro and Sara West fields would be allocated to Sindh government, or its designated entity, subject to the conditions that (i) OGDC will be paid according to petroleum concession agreement, (ii) policy price for gas as well as products ie LPG and condensate, (iii) product disposal by the buyer, in accordance with the prevalent rules and regulation and (iv) all applicable taxes.
"But, after decision of ECC that clearly states that gas from dormant fields has been allocated to Sindh, the latter has come up with a demand to hand over the fields and wants OGDC to make investment to develop these fields," sources said, adding that during the hours-long meeting held on Friday, OGDC authorities clearly refused to accept any demand of Sindh government to this effect.
OGDC Board of Directors (BoD) had decided to offer sale of hydrocarbon resources at four wellhead condensate gas fields to Sindh province, turning down the plan to sell these four fields to private sector parties.
Sindh government had written a letter to federal government that it had right to get fields especially after 18th amendment. "Keeping in view of the situation emerged after Sindh''s letter to federal government, OGDC had scrapped tender whose bids opening was scheduled on September 30, 2010," sources said. They added that OGDC board had also approved the reference price to sell hydrocarbon resources in light of Gas Purchase Agreement (GPA) inked with other exploration companies.
In a letter sent to prospective bidders, MD OGDC Naeem Malik had stated: "Reference advertisement published in the National Press on August 28, 2010 for Expression of Interest for sale of Hydrocarbon Resources at wellhead Jakhro condensate Gas Field has been cancelled till further order".