Special Report
ISLAMABAD:
Though the operator of Zamzama North Block has not drilled a single well after passing 17 years to the grant of license, Petroleum Division set to grant another license extension to the Zamzama North Exploration License (E.L).
Sources privy to the development informed that instead of cancelling E.L or imposing a penalty on the operator to teach a lesson, the petroleum division is striving hard to grant extension to the Zamzama North Exploration License (E.L) as it (Petroleum division) sought the Prime Minister’s consent for granting another extension to the license. They said that the operator has so far failed to drill a single well out of three during the last 17 years to meet the minimum commitment of the license (E.L). They said Zamzama North Block is a prospective Block where seismic data has been acquired but exploratory well(s) could not be drilled by the operator due to unknown reasons. The Zamzama North Block is operated by Heritage Oil and Gas Limited (HOGL) and the Joint Venture Partners (JVPs) have requested grant of two years extension for the exploration license effective from the date of extension to discharge its outstanding work commitment, said sources.
They added that the company has sought approval for the change of operatorship from Heritage Oil and Gas Limited (HOGL) to Al-Haj Pakistan Exploration Limited (APEL) and also approval for assignments for working interests.
“HOGL have paid assignment fees and provided like particulars of proposed assignees, as required under the legal requirements,” said sources, adding that “ The petroleum division is set to give extension to Zamzama North Block license and sought Prime Minister Shahbaz Sharif’s consent as Minister In-charge for Petroleum Division for the submission of a summary before the federal cabinet’s economic coordination committee (ECC) for obtaining its necessary approval before granting another extension in Zamzama North Exploration License”.
According to available documents, Zamzama North Exploration License (E.L) falling in district Naushahro Feroz and Dadu covering an area 1229.23 Square Kilometers, was granted to M/s Hycarbex American Energy INC as operator on 15-12-2007 in accordance with Pakistan Petroleum (exploration & Production Rules, 2001 with minimum work commitment of 300 L. Kms 2D seismic data acquisition and drilling of three exploratory wells) . Later on, operatorship of the said Block was transferred to M/s Heritage Oil and Gas Limited (HOGL).
The current Joint Venture Partners of Zamzama North include HOGL with 48% working interest, Hycarbex American Energy INC with 20% working interest, Sprint Energy Private Limited with 24% working interest and Trakker Energy Private Limited with 8% working interest.
The Zamzama North E.L expired on 14-12-2010 after which further extension was not granted due to the fact that the company was unable to fulfill the minimum work commitment within stipulated time frame as required under Petroleum Concession Agreement (PCA) and Pakistan Petroleum (Exploration and Production) Rules, 2001. Subsequently the company was served a notice under Rules-69 (a) followed by a Show Cause Notice to remedy the default. Finally, the company was also given the opportunity of Personal Hearing over the said E.L and Show Cause Notice was withdrawn and conditional consent was granted that M/HOGL shall be entitled for grant of extension for a period of two years with effect from issuance date of extension letter by the government subject to compliance of certain conditions.
The sources also raised concerns over the withdrawal of the Show Cause Notice and claimed that the notice cannot be withdrawn on the Block without approval of the Cabinet – this has been done illegally because all of the cases for revival have been approved by Cabinet. They further alleged that Heritage Oil has not fulfilled the provisions given in the conditional extension while extension and assignment cannot be granted in Zamzama North Block unilaterally as the same process of approval of ECC and Cabinet was not carried out for withdrawal of show cause notice. They said the Block needs to fall under revocation and can only be revived after clearance approval from Cabinet. The proposed assignee in this case along with the proposed operator is Al-Haj, said sources.
Al-Haj has allegedly been part of a dubious transaction wherein it took over Premier Oil’s assets in Pakistan – this approval of transfer of assets and interests was not given by either Secretary, Minister, ECC or Cabinet as the approval was allegedly done at the level of the then Additional Secretary Sher Afghan which is strictly against the law, sources opined.
Sources further said that in 2019, 11 Exploration Licences were revoked on account of non-performance and were issued Revocation Licences. However, the then Director General Petroleum Concessions Qazi Muhammad Saleem Siddiqui excluded Zamzama North Block from this list even though the Block was awarded in 2006-07 and no work has been done in the Block while now this Block is currently being assessed by DGPC for extension and regularisation.
“This Block should immediately be revoked and brought in bidding as per the normal procedure. Any alternative action will be against the rules and regulations,” said sources.
