For further information please visit - www.mpnr.gov.pk

• It provides package for both the upstream as well as downstream activities.
• It covers mobilization of greater resources and promoters private sector investment for enhancing domestic oil and gas production.
• Improved incentives package, procedure, regulatory frame work and transparency are the key features of 1997 - Petroleum Policy.
• Initiative has been taken and further efforts are underway to attract private investment in improving oil & gas infrastructure as well as its distribution.
• No government permission required for setting up refineries.
• Import parity price formula based on Singapore mean.
• Import of crude oil from any source will be allowed.
• Export of surplus products will also be allowed.
• 3 MNCs (PSO, Shell, Caltex) are marketing petroleum products.
• 2 new companies (Attock Petroleum and PARCO - Total) have also be allowed for marketing pet. products.
• Investment Policy covers oil refining and manufacture of petroleum products under Hi-Tech category
• This import of PME is allowed at zero-rated customs duty and FYA @ 90% of PME cost is available.

• A new Offshore Prospectivity Zone 'O' created to provide following incentives for offshore E&P :

  • Agreement : Production Sharing Contract.
  • Royalty : 0% for first 4 years of Commercial Production rising to 5% in year 5, 10% in year 6 and 12.5% thereafter.
  • Cost Recovery : Limited to 85% including royalty of 12.5%.
  • Corporate Tax : capped at 40% (compared to 50-55% for Onshore).
  • Import duties and taxes to be zero for exploration and 3% after the first commercial discovery.
  • Production Bonuses :
    • US$ 1 million at start of Production (within 90 days).
    • US$ 2 million upon reaching 200 MMcfd or equivalent.
    • US$ 5 million upon reaching 600 MMcfd or equivalent.
  • Oil & Gas Price : Same as Petroleum Policy 1994.
  • A Green Area Map has been identified where no clearance would be required for concession blocks falling inside the green areas.
  • All applications for exploration licences are decided within 60 days. Applications, which are contested, may take up to 120 days but no more.
  • The Government of Pakistan would institute programs like basin studies, geological/ geo-chemical studies, seismic surveys etc., directly on a multi-client basis, through services contractors.

OIL & GAS
10 Year Road Map for Private Investment

• Deregulated oil and gas sector completely. Government to be responsible only for policy formulation.
• Increase number of exploratory wells per year from current 15 to 100.
• Increase oil production from current 56,000 to 100,000 barrels per day
• Increase gas production from current 2.4 to 5.0 billion cubic feet per day.
• Reduce import of refined products to 90% of total consumption. This will require additional refining capacity of above 6 million tones per year. Eliminate imports of fuel oil.
• Construct cross-country oil pipelines to introduce efficiency and reduce burden on roads.
• Increase oil storage capacity from current 19 days cover to 45 days.
• Strengthen R&D support to the Government.
• Eliminate lead in gasoline. Reduce sulphur in diesel oil from current 1% to 0.05%. Promote CNG for diesel oil substitution.
• Encourage trans-boundary trade of clean energy (natural gas) and promote regional energy cooperation in South Asia.

For further information please visit - www.mpnr.gov.pk