Pakistan’s Petroluem Policy is golbally competative – Pakistan oil and gas news

Pakistan’s Petroluem Policy is golbally competative – Pakistan oil and gas news

Pakistan has been seven previous
oil policies in the past two decades, between the policy of successive provide more incentives to potential investors.

The crude oil production meets only about 20 percent of
domestic demand, and the most abundant gas production has been overtaken by the increasing demand.

The country is traditionally a country rich in resources, but have great untapped potential
in land and sea borders. While
there was a steady flow of upstream investment in the eighties and nineties, new investment in the past five years has dried up due to factors such as subsidized prices, geopolitical concerns, and geological hazards.

The Petroleum Policy of 2012 provides for the improvement
of tax incentives to accelerate the exploration and production as a matter of urgency compared to recent policies.
However, there is still room for improvement before the tax
system can be considered competitive, taking into account the geopolitical risks and business of the country.

Policy Change: The Politics of 2012 has come out with a few changes compared to 2009 politics.
The oil windfall Levy (ILO) and the Windfall Levy Gas (WLG) charges have been reduced
from 50 percent to 40 percent. The oil price range for the applicability of WLO has also moved above $ 30-100/bbl
range of $ 40-110/bbl. These changes are possibly due to the nature of these exorbitant
costs in the current environment of high prices, especially oil.

The minimum working interest that local businesses are required to hold has increased 20 percent
to 15 percent.
This is an attempt to encourage local participation and to allow smooth transfer of technology and
expertise. In addition, the two terms for
renewal of exploration license after the initial term of five years have been reduced to a period of one year each of the last two years each.
The period of extension beyond these
terms, due to exceptional circumstances (such as availability of equipment, safety issues, etc) has also been reduced from 36 to 24 months.
This is the excuse to discourage companies from
excessive delays in their work programs and to encourage them to aspire to faster completion of activities involved.

One of the improvements favorable to investors in the
new policy is that the burden of costs of pipeline construction has moved from the producer to the SSGC and the SNGPL.
Other
management changes include the introduction of a mechanism for quality discount in the sale of natural gas to purchasers designated by the governments under which producers would not be unduly penalized.

Short URL: https://www.newspakistan.pk/?p=20909

Posted by Ahmed Tariq on Apr 30 2012. Filed under Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry