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PART-I GENERAL
10
11
15
21
26
PART-VII - MISCELLANEOUS
28
SCHEDULES
FIRST SCHEDULE
PREQUALIFICATION REQUIREMENTS
SECOND SCHEDULE
APPLICATION FOR A RECONNAISSANCE PERMIT,
EXPLORATION LICENCE OR
DEVELOPMENT AND PRODUCTION LEASE
EXHIBIT-I
PARTICULARS TO BE FURNISHED BY APPLICANT FOR
AN EXPLORATION LICENCE
THIRD SCHEDULE
PART-I
STANDARD FORM OF RECONNAISSANCE PERMIT
PART-II
STANDARD FORM OF EXPLORATION LICENCE
PART-III
ANNEXURES
ANNEXURE -1: MAP OF LICENCING ZONES
ANNEXURE -2: PROCEDURE FOR GRANT OF E&P RIGHTS
Notification
SRO XXXX: In exercise of the powers conferred by section 2 of the
Regulation of Mines and Oil fields and Mineral Development (Government
Control) Act, 1948 (XXIV of 1948), the Federal Government is pleased to
make the following rules, namely:PAKISTAN ONSHORE PETROLEUM (EXPLORATION AND PRODUCTION)
RULES 2008
Part I - General
1. Short Title & Commencement.(1)
These Rules may be called the Pakistan Onshore Petroleum
(Exploration and Production) Rules 2008.
(2)
These Rules are applicable to the onshore areas of Pakistan.
(3)
These shall apply to the regulation of all petroleum rights except
those relating to Coal Bed Methane.
(4)
They shall come into force at once.
2. Definitions.In these rules and in every permit, licence and lease issued hereunder,
unless there is anything repugnant in the subject or context,
(1)allowed transportation cost
means the reasonable actual cost
incurred for moving the petroleum produced and saved from the
field gate to the point of determination of value of the petroleum as
approved by DGPC;
(2)"arms length sales" means the sales made freely in the open market,
in freely convertible currencies between willing and unrelated
sellers and buyers having conflicting interests and in which such
buyers and sellers have no contractual or other relationship,
directly or indirectly, or any common or joint interest as is
reasonably likely to influence selling prices shall, interalia, exclude
the value of sales (whether direct or indirect, through brokers or
otherwise) involving an affiliate, sale between Government to
Government entities, counter trades, restricted or distress sales,
sales involving barter arrangements and generally any transactions
motivated in whole, or in part, by consideration other than normal
commercial practices;
(3)balanced scorecard means an evaluation tool to be used by DGPC in
order to evaluate bids in a clear and transparent manner;
(4)Coal Bed Methane (CBM) means gas produced by drilling wells within
the coal seams, that is, methane physically associated with coal
(which includes methane absorbed, adsorbed, and contained in
pores and fractures) and produced within coal seams which has
such distinct biomarker or foot print that conclusively proves to
(14)
(15)
(16)
(17)
(18)
(19)
(20)
(21)
(22)
(23)
(24)
(25)
(26)
(27)
(28)
(29)
(30)
(31)
(32)
(33)
(34)
administration and interpretation of these rules and the execution of all duties
imposed upon him by these rules, or pursuant to any agreement or any other
function entrusted by the Federal Government.
4. Division of area and Zones.(1)Any area of Pakistan may be divided into blocks of size and shapes the
Government may determine from time to time.
(2)The licencing zones will be as per map attached as Annexure -1.
5. Company pre-qualification for grant of petroleum right.- In order to apply
for a grant of a petroleum right the applicant company shall get itself prequalified at least one month before close of Invitation to Bid, in the following
manner:
(1)
(2)
(3)
(4)
(5)
Every application shall be made in writing in the form set out in the Second
Schedule hereto, addressed to DGPC. Every application shall be entered in
the register to be maintained by DGPC.
(2)
The application shall include details of any changes in the status or
experience of the company that has occurred since the company
completed pre-qualification.
(3)
(b)
(c)
(4)
(5)
(6)
8. Separate application for each area.(1)Where an applicant seeks a petroleum right over two or more areas
which are not contiguous, the applicant shall apply for separate
petroleum rights over each such area, unless otherwise permitted
by DGPC.
(2)Nothing in these rules shall prevent more than one petroleum right
being granted to the same applicant.
9. Bid Evaluation Procedure.-
paragraph 11.2) below) is above USD 45/bbl; with a minimum GPG set at 0.2
and a maximum GPG allowed set at 1.0. No applicant company will bid GPG
at less than 0.2 or more than 1.0 unless instructed to by DGPC prior to a
rebid in the case of a draw as outlined in Annexure II hereof.
2. Work Commitments as per Annexure 5 of the Policy.
10.
Several holders of a Petroleum Right.Where the Petroleum Right is held by two or more companies, they shall
be liable jointly and severally towards the Government for obligations and
liabilities, resulting from their activities pursuant to the petroleum right.
The companies shall, with the prior written approval of the Government,
appoint an operator from amongst them, except that such special
arrangements as to the operatorship will be applicable as may be
approved by the Government under rules 65 and 67. No change in such
appointment shall be made without the Government's prior approval.
11. Petroleum right not assignable without consent.A petroleum right or any working interest therein shall not be assigned
without the previous consent in writing of the Government.
12. Method of making applications for assignments.- An application by the
(2)
17. Terms and conditions of a petroleum right.Every permit, licence and lease shall, subject to such modifications as
may be made by the Government, be in the form set out in Parts I,II
and III, as the case may be, of the Third Schedule hereto and shall
include such additional clauses relating to ancillary or incidental matters
as the Government may deem fit to insert.
18. Performance Guarantees.(1)
DGPC shall require successful applicants for petroleum exploration
licences to furnish, in an acceptable form, a guarantee or
guarantees, with respect to its work commitments on or before
the execution of the petroleum exploration licence.
(2)
(3)
10
11
comprised in the permit area pay to the Government rent at the rate of
two hundred rupees per year.
12
(2)
(3)
(4)
(5)
(b)
(c)
(6)
(c)
(d)
(7)
(8)
25. Appraisal, Evaluation and Renewal.A holder of a licence having made a discovery of petroleum shall
perform such additional work as the Government, after consultation with
the holder of the Licence, may specify, so as to enable the holder of the
Licence to make timely determination of a discovery as a commercial
discovery. Subject to agreement on such additional work and the holder
of the Licence having complied with the work programme and his other
obligations shall be entitled to renewal of the licence not exceeding two
years for the purpose of expeditious appraisal and evaluation of the
discovery. The renewal shall only apply to the discovery area. The term
of the appraisal renewal may be extended further for such period as may be
approved by DGPC on case to case basis following a written request of the
holder of a licence.
26. Extended Well Testing.(1)
14
(2)
(c).
(3)
(4)
(5)
(6)
(2)
15
16
17
(3)
33. Rights of lease holder.The holder of lease shall have an exclusive right to perform activities in
connection with the development and production of petroleum in the
area covered by the lease, including the right to undertake
transportation of petroleum, subject to approval pursuant to rule 38.
34. Shape of discovery area.Each discovery area in respect of which a lease is granted shall be laid
out in straight lines between well defined points as far as practically
possible and must also be marked with permanent physical boundaries.
35. Survey Expense.Before a lease is granted by the Government the applicant shall, if so
required by the Government, at his own expense cause a topographical
survey of the land specified therein to be made to scale normally
required for petroleum right purposes, and approved by the Survey of
Pakistan, and submit 6 copies thereof to the Government.
36. Lease Period.(1)
A lease shall be for the period for which application has been made
and supported by relevant technical and other information but shall
not exceed twenty-five years. In the event the lease is initially
granted for a period less than twenty five years, the same may be
extended for the remaining period provided commercial production
is continued.
(2)
Upon application from an operator, DGPC may renew the lease for
a period, not exceeding five years, if commercial production is
continuing at the time of the application, subject to the following:
(a) the request for a renewal along with revised development
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(1)
For grant of petroleum rights after the expiry of lease period, DGPC
will invite bids one year before the end of the lease period from prequalified companies over the lease area, in relation to any
producing field for an additional ten years. The bids will be
evaluated on the basis of signature bonus.
(2)
(3)
(ii)
(iii)
(iv)
(v)
19
(3)
After approval of the plan, the holder of the Lease shall carry out
development and production in accordance with the plan, subject
to such modifications as may be necessary and are approved by
the Government from time to time.
(2)
(3)
has the right to lift and transport petroleum from the lease area, either
through transportation facilities owned wholly or partly by himself or
through access to transportation facilities owned by a third party and
such approval shall not be unreasonably withheld or delayed.
The holder of the Lease shall submit to the regulator concerned, an
application comprising the proposed organization and implementation
of the transportation system. In case of pipeline transportation, the
application shall also comprise the design, construction and route
plans.
The regulator concerned may, on giving its approval, stipulate in
accordance with the policy in vogue such conditions as are
reasonable and necessary to secure a rational system of
transportation of petroleum and it may(a)
require that several lease holders install jointly-owned
transportation facilities; and
(b)
40. Royalty.(1)
Royalty on petroleum produced and saved shall be payable at the
(2)
rate of twelve and half percent (12.5%) of the value unless a higher
rate for royalty is provided for in the relevant PCA between the holder
of a petroleum right and the Government.
Royalty shall be paid in cash unless the Government elects to take
the delivery of royalty ( wholly or partially) in kind at field gate on a six
20
(3)
(4)
(5)
(6)
(7)
(8)
For the purpose of calculating the amount due by way of royalty, the value
of the petroleum produced and saved shall be determined at the field gate
by using actual selling price in the following manner, namely:(1)
(2)
In all other cases, the actual selling price means the greater of-
21
(a).
(b).
the fair market price received through arms length sales of the
petroleum less the allowed transportation costs; or
(c).
the price applicable to the sales made under sub-rule (1) above.
(2)
advance, rent at the rate of Rs.7, 500 per square kilometre or part
thereof covering the lease area during the initial period and rent at
the rate of Rs.10, 000 per square kilometre or part thereof covering
the lease area during the renewal period of a lease and further lease
term extension.
A lease may include provision for annual adjustment of the rent due
by reference to an appropriate index so as to ensure that the rent
retains its value in real terms.
44. Surface rent.The holder of a lease shall pay for all land which he may use or occupy
for the purposes of the operations conducted under the lease, a surface
rent at the rate assessable under the revenue and rent law in the district
in which the land is situated and water rates, if any, ordinarily
assessable under any relevant rules if the land has not been occupied
for the winning of petroleum.
45. National Market Deliveries.(1)
The Government may decide that the holder of a petroleum right
shall deliver petroleum from his production to cover the
requirements of the national market for petroleum. The national
market for petroleum shall for this purpose means the total
market requirements, less petroleum produced by or otherwise
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(2)
(3)
(4)
23
or any equipment used for that purpose. The DGPC, may require
that no alteration shall be made save in the presence of an officer
authorized by him.
47. Revocation of lease.(1)
The lease may be revoked if regular commercial production has not
(2)
commenced within five years from the grant of the lease. The lease
may also be revoked if production has terminated for more than
ninety days without prior written approval of the Government, unless
this is due to force majeure or any other reason beyond the control of
the holder of a lease and acceptable to the Government.
In the event, the holder of a lease is found to have contravened subrule (1) above, the Government may issue a ninety days notice
requiring the holder of the lease to remedy the breach within the
notice period failing which the Government may revoke the lease
unless a plausible justification is provided by the holder of a lease
and accepted by DGPC.
PART V
(2)
(3)
The records shall be kept and maintained for a period of six years
following the end of the calendar year to which the information
contained in the record relates or for a longer period as is
required under the applicable law. In case of any particular
record, upon application by the holder of Petroleum Right, the
DGPC may consent in writing to the destruction of record before
the end of the six years period or such other period as is required
under the applicable laws as the case may be.
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(1)
(2)
the strata and subsoil through which the well was drilled;
(b)
(c)
(d)
minerals
51. Production Records.The holder of a Petroleum Right shall always keep full and correct record
of production which shall contain accurate entries of:
(1) the gross quantity and quality of petroleum won and saved;
(2) the method and results of tests conducted;
(3) the quantity and quality of petroleum delivered in Pakistan and
exported;
(4) the quantity and quality of petroleum used for re-injection,
pressure maintenance, venting, flaring, drilling or other operational
purposes;
(5) the quantity and quality of petroleum sold, the name of the
purchaser and the price at which it has been sold supported by
necessary documents;
(6) the quantity and quality of natural gas treated and processed for
the removal of impurities and inerts and natural gas liquids and
liquefied petroleum gases and the quantity and quality of any
liquids, gases or any solids obtained from it; and
(7) such further particulars as the DGPC may from time to time,
require.
52. Data Rights.(1)
All data including but not limited to, wells logs, maps, magnetic
tapes, cores, samples and any other geological and geophysical
information obtained by the holder of a Petroleum Right as a result
of his activities in a Permit, Licence or Lease shall be the property
25
(b)
(c)
(d)
26
(1) The DGPC or any authorized officer, may, at any reasonable time,
after notice in writing, enter any place where any activities or
business is carried out by a holder of Petroleum Right under the
Rules, for the purpose of auditing or inspection or examination of,
inter alia, wells, record, plants, appliances, buildings, or any other
works.
(2) The holder of Petroleum Right, for the purpose of an audit, or
inspection or examination shall:
(a)
(b)
(b)
(c)
(d)
27
(a)
(b)
(c)
(d)
56. Daily Reports.During drilling of a well, the holder of Petroleum Rights shall provide
copies of the daily well reports on a prescribed format to DGPC.
57. Occasional Reports.The holder of a Petroleum Right shall submit to the DGPC, the following
reports namely:(1)
(2)
(3)
(i)
(ii)
(iii)
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(4)
(ii)
(iii)
(5)
(6)
(7)
58. General.The reports referred to in this Part V of these Rules shall be made in
such form and manner as the DGPC may prescribe.
59. Reports of Discovery.(1)
(2)
29
(2)
(b)
(c)
(d)
(e)
(3)
(4)
The Government may from time to time, determine and notify the
standards applicable to the operations under these Rules.
(2)
30
(3)
The holder of Petroleum Right shall not flare or vent any natural
gas without the prior approval of the Government in writing under
these Rules.
The holder of a Petroleum Right shall not commence drilling, reentry, testing and related operations or abandonment of any well
without first having obtained the approval of the DGPC in writing
and it shall:
(a)
(b)
(c)
(2)
63. Shape of Relinquished Areas.Areas which are relinquished or surrendered shall be of sufficient size
and shape to enable petroleum operations to be carried out thereon.
PART VII MISCELLANEOUS
64. Use of Pakistani Goods and Services.(1)
In all activities carried out pursuant to these Rules, the holder of
Petroleum Right shall ensure the use of qualified Pakistani goods
and services as provided in sub rule (2) below, to the extent that
such goods and services are competitive with regard to price,
quality, quantity and delivery schedule.
(2)
Local producers who are qualified under the relevant customs
general order (CGO) of supplying goods and services of type
demanded shall be included in invitations to tenders.
65. Employment and Training of Pakistani Personnel.(1)
The holder of
Petroleum Right shall give preference to the
nationals of Pakistan for employment in its organization at all
levels and in all branches including technical financial,
commercial, legal and administrative units and to arrange for the
training in Pakistan and abroad, of nationals of Pakistan to fill the
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(2)
(3)
If the
agreement on joint exploration and development or
unitization plan referred to in Sub-Rules (1) and (2), is not
reached within reasonable period of time, the Government may, in
the public interest, by notice in writing to all concerned parties,
direct to finalize and submit for approval of the Government
relevant plan within the period stipulated in the notice. In the
event such plan is not submitted to the Government within the
stipulated period or such plan has not been approved by the
Government, the Government may appoint an independent
consultant to prepare such a plan at the cost of the holder of
petroleum right . The plan so prepared by the consultant will be
considered and approved by the Government with appropriate
changes for implementation as per approved schedule. The
Government may, however, stipulate such additional conditions as
may reasonably be considered appropriate in the interest of such
plan.
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(2) In case the holder of the lease decides not to undertake exploration
pursuant to Sub-Rule (1) and a third party is granted petroleum
exploration rights over any or all the horizons underlying the
Lease area, then such a third party and the existing holder of the
lease shall within ninety days enter into an agreement setting
forth the detailed terms and conditions of operating within the
Lease area so that the activities can be coordinated in a just and
equitable manner. In case such an agreement is not reached
between the parties within the specified time or such agreement
has not been approved by the Government, the Government may
appoint an independent consultant to prepare such an agreement
at the cost of the holders of petroleum right. The plan so
prepared by the consultant will be considered and approved by
the Government with appropriate changes for implementation as
per approved schedule. The Government may, however, stipulate
such additional conditions as may be reasonably considered
appropriate in the interest of such an agreement.
(3) For the purpose of petroleum exploration within a Lease area, the
provisions of Rules 23, 24, 25, 26, 27 and 31 shall apply, mutatis
mutandis provided that where an existing Lease holder makes a
new commercial discovery, the provisions of Rule 27 shall not be
applicable and the existing Lease shall be amended to bring the
Discovery area of such Commercial Discovery under the purview
of the Lease. In case any Discovery area covered under a Lease
extends beyond the geographical limits of the Lease area, the
Government may, upon request, allow the holder of the lease to
undertake appraisal of such Discovery area beyond the limits of
the Lease in an open area and revise the co-ordinates of the
Lease area if justified by the results of the appraisal pursuant to
Rule 24.
68. Exploration and Use of Facilities by a Third Party.(1)
The Government may allow a third party
to undertake
exploration in the area of a Licence or holder of the lease as may
be necessary to obtain sufficient knowledge as to the geological
conditions in areas surrounding the area of such holder. The said
exploration activities must not unreasonably interfere with the
33
69. General Right of holder of the lease to Enter Land.Subject to approval of the Government and of any other authority which
may be involved, and on such conditions as may be stipulated, the
holder of the lease shall have the following rights, as required for the
purpose of carrying out operations under the lease:
(1)
(2)
to appropriate water;
(3)
to store petroleum;
(4)
(5)
(6)
(7)
to enclose with a fence areas for which surface rent is paid; and
(8)
34
(b)
(2)
(i)
(ii)
(iii)
draw water from the said area and have free access
thereto; and
(iv)
pass and repass at all times over the said area for
all such purposes as occasion shall require; and
35
If the holder of a Petroleum Right shall, at any time, fails to perform its
obligations under these Rules or under any agreement with the
Government, the DGPC shall be entitled, after giving reasonable notice
in writing of his intention, to execute any works which may be deemed
necessary to secure the performance of the said obligations or any of
them and to recover the costs and expenses of so doing from the holder
of Petroleum Right.
73. Power to Control Spill or Waste.(1) A holder of Petroleum Right shall at all times, has obligation not to
cause spill and waste.
(2) Where DGPC, on reasonable grounds, is of the opinion that, with
respect to any operation of the holder of Petroleum Right, spill or
waste is required to be controlled or prevented, may order to the
holder of Petroleum Right to control or prevent spill and waste
within a reasonable period of time, failing which the DGPC may
cause to take such necessary steps and measures to control or
prevent the spill or waste as may be required and all cost thereof
shall be borne by the holder of Petroleum Rights.
(3) If there is any dispute, controversy or claim arising out of or in
relation to the exercise of the powers by the DGPC under SubRule(2), then the DGPC and the holder of Petroleum Right shall
make all reasonable best efforts to settle such dispute, controversy
or claim within sixty days of the issuance of order by the DGPC
under Sub-rule (2), failing which such dispute, controversy or claim
shall be referred to an independent consultant which shall be
appointed by the Government at the cost of and with consent of the
holder of Petroleum Right. The findings of such consultant shall be
binding on the DGPC and the holder of Petroleum Right.
(4)
74. Power of Revocation.In addition to other grounds for revocation stated in these Rules, the
Government may revoke a Petroleum Right after serving a thirty days
show cause notice if:
(1)
36
(3)
(4)
(5)
(2)
(3)
37
(5)
(2)
77. Miscellaneous Obligations.The holder of Petroleum Right shall have an organization in Pakistan
with sufficient competence and capacity to conduct all operations and
activities pursuant to these Rules and shall;
(a)
(b)
38
(1)
(2)
79. Import Duties.Import duties applicable to Exploration and Production companies and
service companies shall be as per applicable SRO at the time of receipt
of bids for the subject block which will be reflected and frozen in the
subsequent PCA executed for the subject block.
80. Training and Development.(1)
Training shall be provided for capacity building of Pakistani
employees of E&P companies, DGPC and Ministry staff from
training funds provided under the PCA.
(2)
An amount of US Dollars 25,000 per year shall be spent during
exploration phase and US Dollars 50,000 per year during
development and production phase.
(3)
Training program and funds for DGPC and Ministry(including policy
wing) staff shall be utilized as per guidelines issued by DGPC from
time to time.
(4)
Training amount unspent for the year and accrued shall be spent
for capacity building of DGPCs, consultants and legal staff hired
by DGPC and for workshops and seminars
conducted by
exploration and production companies.
81. Force Majeure.(1)
(2)
(3)
39
the act of
lightening,
which the
or control.
(4)
82. Arbitration.Except as otherwise agreed or expressly provided for in these Rules, any
question or dispute regarding the Petroleum Right or any matter or thing
connected therewith shall be resolved by arbitration in Pakistan and in
accordance with Pakistan laws.
83. Transitional.(1)
The Pakistan Petroleum (Exploration and Production) Rules, 2001
are hereby repealed.
(2)
Notwithstanding the repeal of the Pakistan Petroleum (Exploration
and Production) Rules, 2001, hereinafter referred to as the said
rules, where any person holds any permit, licence or lease
granted or renewed under the said rules the provisions of the said
rules shall continue to apply to such permit, licence or lease, as if
the said rules have not been repealed.
(3)
In case the holder of a petroleum right opts for conversion under
rule 77, the provisions of these rules shall be applicable.
84. Implementation of the policy, removal of difficulties, addressing
of anomalies, framework for institutional development and
strengthening of the Policy Wing.(1)
A Committee shall be constituted to address the issues of the
implementation of this policy, removal of difficulties, addressing of
anomalies and approving framework for institutional development
and strengthening of the Policy Wing to enhance its professional
competence for policy formulation and upstream regulation. The
committee shall comprise of the following:
Minister for Petroleum and Natural Resources
Chairman
Deputy Chairman Planning Commission
Member
Secretary, Finance Division
Member
Secretary, Petroleum and Natural Resources
Member
Director General Petroleum Concessions
Member/Secretary
(2)
In order to meet the deadlines, a separate cell headed by Director
General Petroleum Concessions {DG(PC)}, as already provided
in Petroleum (Exploration &
Production) Policy 2001, shall
be maintained comprising the following professionals on contract
basis:
(a)
Legal Advisor,
(b)
Financial Consultant,
(c)
Petroleum Economist,
(d)
Petroleum Explorationist and
40
(3)
(4)
(e)
Other professionals on need basis.
The funds generated through sale of technical data and unspent
training amount generated under PCAs and PSAs shall be utilized
for capacity building, strengthening of the Policy Wing of Ministry
of Petroleum and Natural Resources, remunerations of outside
professionals engaged on contract, part time legal
advisors/technical consultants, policy promotional activities,
workshops, seminars, conferences & symposia etc.
Separate procedures/guidelines will be issued by the Ministry of
Petroleum and
Natural Resources in relation to the
provisions at paragraph 12.2 and 12.3 above.
41
42
(2)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
Main activities of the company, with particular reference to its oil and
gas activities, if any.
(h)
(b)
whether a reconnaissance permit, exploration licence or a
petroleum development and production lease will be sought.
(3) The applicant shall furnish such other information as DGPC may, from
time to time specify, including notification of any material change in its status
during the course of processing the application or thereafter which may effect
their pre-qualification status.
(4)
43
Signature(s) of
Date
Applicant
_______
Title
_______
------------------------------------------------------------------------------------------------------*
If the applicant is a subsidiary, the same information shall also be given with respect to its
ultimate parent company.
44
Exhibit - I
Particulars to Be Furnished By Applicant for Company Pre-Qualification
1.
2.
45
46
Exhibit-II
Particulars To Be Furnished By Applicant For Company Pre-Qualification
Category
Technical
Capacity
Operational
Capacity
-Offshore
Years as offshore Operator worldwide or as offshore nonoperator in Pakistan together with Onshore operatorship of at
least 2 years
Operational
Capacity
Onshore
Legal capacity
and compliance
with residential
requirements
Financial Capacity
(Based on Audited
Financial
Statements)
Liquidity Position
Debt : Equity (Benchmark is maximum value)
47
(2)*
(b)
name
(3)
(4)
(5)
Situation and approximate size of the area or areas for which Application
is made.
(6)
State amount of capital available for operations under the Petroleum right
applied for:
(a)
At present available.
(b)
(c)
The applicant must provide documentary evidence along with
application to substantiate the above information to the satisfaction of the
Government.
(7)
Signature(s) of
Date
Applicant
_______
Title
_______
------------------------------------------------------------------------------------------------------*
If the applicant is a subsidary, the same information shall be given with respect to its
ultimate parent company.
48
Exhibit-III
Particulars To Be Furnished By Applicant For An Exploration
Licence / Petroleum Concession Agreement
1.
2.
(b)
If the applicant applies for more than one area (block) the priority
assigned to the different areas (blocks) must be given.
(c)
(d)
(e)
(f)
(g)
(f)
(b)
(c)
49
Coordinate
Km2
(2)
(3)
b)
(4) The laws of Pakistan shall govern all activities pursuant to this Permit.
In witness whereof the President has set his hand and seal and the
Permit Holder(s) has caused its Common seal to be affixed hereon
this
day of
.
50
The Licence is granted to the following parties with working interests as stated
hereunder:
Company
Working Interest
2.
ABC
The Licence gives the Licencee the exclusive right to perform activities in
connection with the exploration for and exploitation of Petroleum in the following
Licence Area:
Block No.
Co-ordinates
3.
The Licence is valid for an initial term of 5 years divided in to two phases of three
years and two years each effective ___________2007 (hereinafter called the Effective
Date). The Licencee shall be entitled to two renewals of two years each of the Licence
as provided for in Rule 21 and Rule 22 of the Pakistan Petroleum (Exploration and
Production) Rules, 2001(hereinafter referred to as the Rules).
4. The Licencee shall pursuant to Rule 20 of the Rules undertake a work programme
which shall be fully completed as per schedule below during the initial term.
(To be reviwed)
The contents of work programme and the timetable for its completion are as
follows:
Licence Year Minimum Work Minimum Expenditure
(US Dollars)
Initial Term
Phase I
Phase II
Fourth Year
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Fifth Year
Total Minimum Expenditure:
a.The Licencee shall undertake to obtain seismic coverage of adequate quality
covering the Licence Area with a Grid of at least ------- not later than ----months and after the Effective Date. In areas where structures are expected to
continue into neighbouring area (blocks), the Director General Petroleum
Concessions (DGPC) may require certain specifications for the survey.
b. The Licencee shall drill one or more Wildcat Wells (Exploration Wells) in the
Licence Area as per work programme indicated in paragraph 4 above.
c. The Licencee shall undertake such coring and other tests and registrations as the
DGPC may regard necessary in order to estimate possible Petroleum finds.
Special care shall be given to coring in all prospective intervals. The sampling
shall lead to exhaustive analysis and interpretations.
d. The term Wildcat Well is defined as an Exploration Well, which tests a
clearly separate geological entity (be it of structural, lithologic, facies or
pressure nature) penetrating all prospective intervals at the particular
location that lie within the terms of the work programme as defined
above. If the Licencee wish to get the well approved as a Wildcat Well
such approval may be obtained from the DGPC before the
commencement of drilling, provided that all relevant data and
interpretation have been submitted to him.
e. If the Licencee fail to complete the above mentioned work programme within
the time limits specified, they shall pay the Minimum Expenditure specified in
paragraph 4 above as liquidated damages to Government. This will also apply to
renewals under Rule 23(5) of the Rules.
5.
The Licencee shall simultaneously with the grant of the Licence but not later than
30 days thereafter enter into a concession agreement with the President for the
Licence Area strictly in line with the Model Concession Agreement. If the
Licencees fail to sign the Petroleum Concession Agreement over the area within
thirty (30) days of grant of Licence, the Licence shall be terminated automatically,
without any further notice thereof. Any subsequent amendment, supplement or
exception from the Concession Agreement will require Governments prior written
approval.
6.
a. Discovery of all minerals necessary for the generation of Nuclear Energy shall
be reported by Licencee to Pakistan Atomic Energy Commission and DGPC.
Licencee shall have no right to develop/exploit such minerals without prior
approval of the Pakistan Atomic Energy Commission.
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b. The Licencee shall allow existing and future licence and lease holders for solid
mineral being administered by a Provincial Government in any land which is
comprised in or adjoins or is reached by the Area, all reasonable facilities for
their access hereto. Exploration work will not be carried out over the area
already granted under mining leases/prospecting licences for Minerals except
with the prior approval of the Provincial Government and the companies
concerned.
c.The Licencee will without delay report to the Provincial Government the
discovery of any mineral ore on, or within any of the Area in question which is
administered by the Provincial Government, but Licencee shall not have a right
to exploit these minerals/ores unless a formal mining concession has been
granted by the Provincial Government to the Licencee.
d. No operations will be carried out within Municipal limits. The Licencee will
inform DGPC about the programme and specific purpose of visit of its
personnel and others to the Licence Area from time to time so that necessary
security arrangements could be made. Protection of personnel employed must
be coordinated with local civil administration prior to the commencement of
work. All companies (local and foreign) will give advance information and
details about the exploration programme in the Licence Area to local civil
administration and DGPC so as to alert the parties concerned to take necessary
precautions to interalia safeguard vital installations such as microwave towers,
irrigation regulators and other public and private buildings.
e. The unskilled persons to be engaged as labour should be taken from the
inhabitants of the area particularly where the work has to be carried out with
preference to displaced landowners. Rest of the manpower will also be taken
from the area if available. Locals of the area will be considered for grant of
sub-contracts provided their terms are competitive.
f. No employee of the Licencee shall indulge in illegal hunting/trapping of the
wild animals. Violation of the rules shall make the NOC of the provincial
Government liable to cancellation in addition to imposition of penalties as
provided for under the law.
g. The Licencee shall confine their activities to exploration only and no permanent
structure would be constructed on the Area without the prior approval of DGPC.
The Licencee will also not undertake any agricultural or other related activities
nor interfere in the existing grazing or felling rights etc. of the local inhabitants.
In case any loss is caused to public private property, the Licencee will be liable
to pay adequate compensation
h. The local Civil Administration in the Licence Area must be informed in case
any matter needs to be cleared from the Home Department.
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i. The operations will in no way affect or abridge the rights of owners of private
property and necessary procedure according to the relevant law would be
imperative.
j. The Licencee will pay proper compensation to the owners of land prior to
commencement of exploration.
k. The Licencee will approach Survey of Pakistan for issuance of maps in
accordance with the prescribed procedure. The individuals handling restricted
maps will need security clearance.
l. Flying over the Area shall not be allowed without permission of the concerned
security agencies.
m. Visits will be properly conducted and restricted to the open areas. Aerial
survey/photography in the Licence Area will not be undertaken. In case it is
essential, a separate clearance for the same will be obtained through DGPC
from security agencies. If allowed, the aerial survey/photography will invariably
be carried out by Survey of Pakistan. Visits, trespassing or photography
(aerial/ground) of sensitive areas, restricted areas, key points and vital
installations is prohibited. All movement of personnel and vehicles will be
coordinated with concerned Formation Headquarters.
n. All mapping information including sketches and photography to be prepared by
the Licencee concerning the Licence Area shall not be released to anyone except
as permissible under the Concession Agreement and the relevant rules.
o. No road/tracks will be constructed/developed in the Licence Area without prior
clearance of security agencies. The tracks that may be allowed to be developed
should preferably be parallel to the border and constructed in consultation with
the local Formation Headquarters. All such tracks should be rendered
unserviceable by the Licencee, when no longer required again in consultation
with the local Formation Headquarters.
p. The Licencee will ensure that no border violation takes place.
q. The Licencee shall ensure that none of its employees, contractors or consultants
discloses any information about the terrain in the area to any individual/agency
without clearance from the General Headquarters (M.I. Directorate).
r. The Licencee will ensure that all the foreigners involved in exploration are
security cleared prior to their arrival in Pakistan. Foreigners working in the
Licence Area will be cleared by the concerned security agencies and should be
registered with FRO concerned under Foreigners Act and full particulars
including photographs shall be supplied to the concerned Provincial
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Capitalized terms used but not defined herein shall have the meaning ascribed
thereto in the Rules and the Petroleum Concession Agreement.
8.
In the event of a conflict between the provisions of this Licence and the
provisions of the
PCA, the provisions of the Licence shall prevail and govern
and such conflict shall be resolved based on the provisions of this Licence.
9.
The laws of Pakistan including the Rules and the relevant Concession Agreement
shall govern all activities pursuant to this Licence.
10.
In witness whereof the President has set his hand and seal and the Licencee has
caused its common seal to be affixed hereon this
day of
2008.
-------------------------------------------------------------------------------------------------------
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(2) This lease gives the lessee(s) the exclusive right to perform activities in
connection with the development and production of petroleum in the following areas:
Lease Area No.
Coordinate
Km2
(3)
(4)
(5) When the deposits have been developed, petroleum shall be produced in
accordance with a production profile approved from time to time by the Government.
(6)
In witness whereof the President has set his hand and seal and the Lessee(s)
has caused its common seal to be affixed hereon this ---day of---.
Secretary MPNR
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Annexure I
MAP OF LICENCING ZONE
JA M M U &
K A S H M IR
D is p u te d T e r r ito r y
Z O N E - II
ZO N E -I
Z O N E - III
ZO N E -O
O ff s h o re
58
Annexure II
relation to onshore and offshore blocks offered through competitive bidding as per
procedure laid down herein below.
2. The granting of Petroleum Exploration Licences for entering into PCA or PSA in
the grant of all Petroleum Exploration Licences for entering into PCAs or PSAs.
2. In the first week of January and June every year, or as and when required, DGPC will
requirements set out in the Rules) will be eligible to make nomination. In the event a
company making a nomination is not pre-qualified, such company will be required to
secure pre-qualification in accordance with the Rules in order to be eligible for
participation in the competitive bidding.
4. In order to promote under-explored areas which either have not been explored during
the last three years or have remained un-contested in an Invitation to Bid during the
last three years, the first applicant would have right to match the highest bid for
blocks nominated in Zone-O and Zone-I. This shall however, not be claimed as a
matter of right.
5. Subject to nominated blocks falling in a green area, DGPC will consider such
nominated blocks for inclusion in the next Invitation to Bid after completing the
necessary internal due diligence.
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6. A Call for Nomination or any submission made in response thereto shall not
constitute or give rise to any obligation on the part of the company making the
submission to participate in Invitation to Bid or on the part of DGPC to make
Invitation to Bid in respect of nominated block.
7. Call for nomination will be issued as per format at Annexure 6 in national
newspapers, the MPNR website as well as a leading oil and gas publication of
international repute.
3.
Invitation to Bid
1. DGPC will issue an Invitation to Bid within 15 days of close of Call for Nomination,
as per the format at Annexure 6, in national newspapers, the MPNR website as well a
leading oil and gas publication of international repute. Invitation to Bid may cover the
nominated blocks and such additional blocks as DGPC may deem appropriate.
2. An Invitation to Bid will remain valid for at least 90 days and all pre-qualified
provide bid documents within 15 days of the request, which will include but not be
limited to copies of: (a) the Policy; (b) the applicable Rules; (c) Model Petroleum
Concessions Agreement and Model Production Sharing Agreement, whichever is
applicable; and (d) information which is available or can be purchased.
5. Bids will be invited based on criteria of the highest work programme determined on
the basis of Work Units as set-out in Annexure 5 and a Gas Price Gradient (GPG).
6. Any pre-qualified company can submit a bid for any block included in Invitation to
bidders should they chose to be present. If only one bid is received, the bidding
company can be considered for award in accordance with the Rules provided the
company offers a reasonable Work Programme commensurate with the prospectivity
of the area.
8. Award of petroleum rights to Pakistani state owned companies will also be subject to
termination of the Invitation to Bid are established and made available to interested
companies along with the bid documents. Furthermore, any changes made to the
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conditions and requirements in the course of the bid procedure are to be notified to all
interested companies immediately by means of bulletins posted to the website and
through registered mail to the companies buying bid documents.
10. Bids are to be submitted in a sealed envelope.
11. All bids are to be made in accordance with the applicable Rules.
12. All bidders are required to notify DGPC should there be an adverse material change
in their status following pre-qualification. GOP will retain the right to refuse the
granting of any rights when this material change prevents a company from meeting
the original pre-qualification requirements.
13. DGPC will make every effort to conclude and sign a Petroleum Concession
Agreement or Production Sharing Agreement as the case may be based strictly on the
model provided with the bid documents within 30 days after the closing date of
Invitation to Bid subject to completion of all documents to be submitted by the
applicant companies.
14. The Government reserves the right to exercise the powers to accept or reject any
A potential investor may apply, in accordance with the Rules, for a non-exclusive
Reconnaissance Permit via direct negotiation with DGPC in any area currently open and
considered by DGPC to be suitable for this purpose.
5. Formal Bid Assessment
Based on the bids submitted by applicant companies/consortia for each offered block,
DGPC will operate a balanced scorecard system providing a performance measurement
tool to be used by DGPC in order to evaluate companies against set performance criteria
in a clear and transparent manner. Pre-qualified companies/consortia are to be evaluated
under the following bid criteria:
3. Gas Price Gradient (GPG) for when the Reference Crude Price (see paragraph 11.2)
below) is above USD 45/bbl; with a minimum GPG set at 0.2 and a maximum GPG
allowed set at 1.0. No applicant company will bid GPG at less than 0.2 or more than
1.0 unless instructed to by DGPC prior to a rebid in the case of a draw as outlined in
paragraph 7. below.
4. Work Commitments as per Annexure 5 of the Policy.
6. Completion of Balanced Scorecard
1. To work out the gas price when the Reference Crude Price exceeds USD 45/bbl,
applicant companies/consortia are required to bid a factor in the gas price formula
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(see section IV of the Policy). This factor, known as the Gas Price Gradient (GPG), is
biddable so as to give advantage to the party that offers the lowest price to sell
available gas. For an example, see Annexure 5 of the Policy.
2. The work commitment component of the bid round will comprise the following:
i.
ii.
Exploratory wells to be drilled and the minimum depth below land surface/seabed
nominated
Measures
Main Weights
20%
Work Commitment on
offered block
Work Units
80%
clearly indicating work units and GPG. The evaluation of work unit commitments
will be pro-rated from the value of the highest work unit commitment see Annexure
5 of the Policy.
2. DGPC will numerically rank bids submitted by candidate companies with regard to
each individual category as stated in the balanced scorecard as per 4.3.1(3) of the
Policy.
3. The bid with the highest weighted average score will be declared the winner.
4. If more than one bid achieves the highest mark and there is a draw, then the
successful bidder will be decided on the basis of bidder offering lower GPG. In such
an event, if GPG offered by the bidders is also same then:
a. Within 15 days of bid opening date, such bidders will be asked to re-bid the
GPG at no more than the previous GPG and with a lower limit of GPG=0 and
work commitment of not less than previously offered.
b. The process will be repeated until there is a clear winner.
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