Presentation On

Pakistan - Oil & Gas Legislation For Upstream

Activities / Pakistan - Oil & Gas Regulation For
Upstream Activities

Development of Oil and Natural Gas

“IGNORANCE OF LAW IS NO EXCUSE”
THE REGULATION OF MINES AND OIL FIELDS AND MINERALS
DEVELOPMENT (GOVERNMENT CONTROL) ACT 1948 (THE ACT)

The basic legislation to regulate petroleum exploration and production

operations in Pakistan is the Regulations of Mines Act Oil Fields &
Mineral Development (Government Control) Act 1948(The Act). This
establishes the power of the government to make rules regarding
licenses, concessions, fees, royalties and other related matters.
 RULES

1. Pakistan Petroleum (Production) Rules 1949

2. Pakistan (Exploration and Production) Rules 1986
3. Pakistan (Exploration and Production) Rules 2001
4. Pakistan Offshore Petroleum (Exploration and Production) Rules, 2003
5. Pakistan Onshore Petroleum (Exploration and Production) Rules, 2009
6. Pakistan Onshore Petroleum (Exploration & Production) Rules 2013
 PETROLEUM POLICIES
1. Pakistan Petroleum Exploration & Production Policy 1991
2. Pakistan Petroleum Exploration & Production Policy 1993
3. Pakistan Petroleum Exploration & Production Policy 1994
4. Pakistan Petroleum Exploration & Production Policy 1997
5. Pakistan Petroleum Exploration & Production Policy 2001
6. Pakistan Petroleum Exploration & Production Policy 2007
7. Pakistan Petroleum Exploration & Production Policy 2009
8. Pakistan Petroleum Exploration & Production Policy 2012
 Entity of safety is universal

Safety is everybody’s business

From the roughneck to the CEO, everybody is responsible for Safety

 MINES ACT 1923

The basic legislature applicable for inspection and safety of

equipment installed and used at mines sites is the Mines Act 1923.
In relation to section 29 of the Act, Government of Pakistan issued
comprehensive Safety Regulations under notification SRO 40 (1)/76
dated 7 January 1976. These regulations were called
Oil & Gas (Safety in Drilling & Production) Rules 1974
COMPLETE LIST OF PERTINENT LEGISLATION FOR REGULATING OIL & GAS OPERATIONS / ACTIVITIES

CHRONOLOGICAL ORDER

1 MINES ACT 1923

2 BOILERS ACT 1923
3 EXPLOSIVES RULES 1934
4 ELECTRICITY RILES 1934
5 FACTORIES ACT
6 PETROLEUM ACT 1937 / PETROLEUM RULES 1937
7 GAS CLYLINDER RULES 1940
8 THE REGULATION OF MINES AND OIL FIELDS AND MINERAL DEVELOPMENT (GOVERNMENT
CONTROL) ACT 1948 INCLUDING AMENDMENT OF 1976
9 PAKISTAN PETROLEUM (PRODUCTION RULES),1949
10 MINERALS GAS RULES 1960 / MINERALS GAS SAFETY RULES 1960
11 LPG (PRODUCTION & DISTRIBUTION) RULES 1971
12 Oil & Gas(Safety in Drilling and Production) Regulations 1974
13 NATURAL GAS (PRICE FOR SUPPLIES BY PURCHASERS ) RULES 1976
14 FOREIGN INVESTMENT PROTECTION LAW 1976 (MODIFICATION OF THE PETROLEUM
REGULATIONS IN 1976)
15 ENVIRONMENTAL PROTECTION ORDINANCE,1983
16 NUCLEAR SAFETY& RADIATION ORDINANCE,1984
17 PETROLEUM PRODUCTION RULES 1986/PETROLEUM(EXPLORATION & PRODUCTION RULES
1986
18 ENVIRNMENTAL IMPACT ASSESSMENT GUIDELINES 1987
19 NATIONAL ENVIRONMENTAL QUALITY STANDARDS (NEQS)
COMPLETE LIST OF PERTINENT LEGISLATION FOR REGULATING OIL & GAS OPERATIONS / ACTIVITIES

CHRONOLOGICAL ORDER

20 NUCLEAR SAFETY& RADIATION REGULATIONS 1990

21 PAKISTAN PETROLEUM EXPLORATION & PRODUCTION POLICY 1991
22 PAKISTAN PETROLEUM EXPLORATION & PRODUCTION POLICY 1993
23 PAKISTAN PETROLEUM EXPLORATION & PRODUCTION POLICY 1994
24 PAKISTAN PETROLEUM EXPLORATION & PRODUCTION POLICY 1997
25 PAKISTAN (EXPLORATION & PRODUCTION) RULES 2001
26 INCOME TAX ORDINANCE 2001 (FIFTH SCHEDULE)
27 NATURAL GAS REGULATORY AUTHORITY (LICENSING) RULES 2002
28 OIL AND GAS REGULATORY AUTHORITY (OGRA) ORDINANCE 2002,
29 NATURAL GAS TARIFF RULES 2002
30 PAKISTAN OFFSHORE PETROLEUM (EXPLORATION & PRODUCTION) RULES 2003
31 PAKISTAN PETROLEUM EXPLORATION & PRODUCTION POLICY 2007
32 PAKISTAN PETROLEUM EXPLORATION & PRODUCTION POLICY 2009
33 PAKISTAN ONSHORE PETROLEUM (EXPLORATION AND PRODUCTION ) RULES 2009
34 PAKISTAN PETROLEUM EXPLORATION & PRODUCTION POLICY 2012
35 PAKISTAN ONSHORE PETROLEUM (EXPLORATION & PRODUCTION ) RULES 2013
36 ISO 9001
37 ISO 14001
38 ISO / TS 16949
 Main Features of Pakistan License (Onshore)

Acreage 2,500 km2

Term 5 years (Phase I for initial 3 years for pre-drilling; Phase II, at
least one well drilled).
Extension Two extensions of two years, each requiring the drilling of a
well.
Relinquishments Phase I—30% of initial area; Phase II, 20% of initial area; First
renewal, 10% of initial area.
Local partners Local carry has recently been eliminated but there still remains
an obligation to have a 15-25% participating interest from local
firms which can be assumed by GOP should the private sector
not be interested or drop out of the venture.
Non-associated gas price 67.5%–72.5%–77.5% of average C&F price of basket of crude
imported the previous semester with a floor of US$10/bbl and
a cap of US$36/bbl with decreasing share of uplift beyond
US$16/bbl. .
Royalty 12.5% at field gate, which can be expensed.
Tax Rate 40%
Production Bonus US$0.5–5 million depending on cumulative production (boe),
which can be expensed with mitigating measures for marginal
fields.
 Oil and Gas Exploration Statistics (Not to date)

Exploratory Activity Current Status

Exploratory wells drilled so far 540
Development Wells 709
Sedimentary Area 827,268 km2 827,268 km2
Exploratory Drilling Density One well /1532 km2
Discoveries: 148
•Oil discoveries 59
•Gas discoveries 89

Overall success ratio 1: 3. 7

Potential Total* Gas Requirements at Candidate Power Plants

System Capacity Fuel Requirements

(MMCFD)
MW MAX AVERAGE
SSGC System
KESC Bin Qasim 1260 235 150
Hubco 1292 240 155
Wapda Jamshoro 880 167 105
Others (Kotri, and so forth) 174 33 20
Sub- Total 3606 675 430
SNGPL System
Wapda Muzaffargarh 1370 300 175
Wapda Others 504 100 70
Kapco 1466 350 220
AES (Lalpir/Pakgen) 727 140 90
Rousch 412 70 45
Sub-Total 4479 960 600
Independent System
Wapda Guddu 1655 360 285

Grand-total 9740 1995 1315

ZONING
PAKISTAN OIL AND GAS PRODUCTION (WHICH FIELDS ARE CONTRIBUTING MAXIMUM)

NO OIL PRODUCTION BBL/DAY GAS PRODUCTION MMCFD

1 Nashpa (OGDCL) 19,560 Mari (MPCL) 570

2 Makori East (MOL) 15,676 Qadarpur (OGDCL) 456
3 Aassu (UEPL) 4,510 Sui (PPL) 420
4 Maramzai (MOL) 3,872 Uch (OGDCL) 391
5 Pasakhi (OGDCL) 3,252 Bhit & Badhra (ENI) 312
6 Kunar (OGDCL) 3,168 Kandhkot (PPL) 150
7 Mehar(OMV ) 3,012 Kadanwari (ENI) 131
8 Mela (OGDCL) 1,996 Sohrab Deep (UEPL) 121
9 Chanda (OGDCL) 1,928 Maramzai (MOL) 102
10 Murid (UEPL) 1,918 Kunar/ Pasakhi Deep 103