Gas royalty funds fail to bring change in Kohat

KOHAT: Kohat district has been receiving a big amount of oil and gas royalty every year, but no corresponding development could be seen in any sector.

District executive officer (finance) Wahidur Rehman Khattak told Dawn that Kohat district had been getting royalty since 2011 according to the ratio of production from the local oil and gas wells.

He said that in 2014-15 Kohat received over Rs61 million in royalty of which 50 per cent was given to the oil and gas producing constituency. Similarly, in 2013-14 the companies gave Rs41 million and so on.

Answering a question, he said that for unknown reasons no mega project could be started.

He admitted that condition of hospitals, roads and water and electricity supply schemes in Kohat had worsened over the years.

Though 50 per cent of the royalty goes to Shakardarra, condition of its hospital could not be improved.

The town has no water and voltage of electricity remains so low that the scheme for bringing water to the area from Indus River was abandoned several years ago.

An official said on condition of anonymity that the funds were being misused otherwise the royalty funds in addition to the annual share of Kohat from the provincial government could solve all major problems of the district.

Mr Khattak said that the royalty funds were released to contractors for the approved schemes, but unfortunately no development could be seen in the district.

Sources said that the companies had promised to reconstruct the hospital and road, but the lawmakers from the area were employing people of their constituencies and keeping mum about the development projects.

It may be recalled that the oil and gas companies had announced a mobile hospital for Shakardarra to reach the scattered population and establishment of a burns centre in Kohat. Residents said that the lawmakers never bothered to pressurise the companies to help resolve problems of their constituencies.

Published in Dawn, February 26th, 2016

KP chief minister seeks recovery of gas loss caused by security threat

Source Dawn

 Khyber Pakhtunkhwa Chief Minister Pervez Khattak has expressed inability of people in his government to enter the Kohat-Gurgury region because of the security situation there and has demanded that the cost of a loss of 11 billion cubic feet of gas in the region be recovered from consumers in Punjab and peaceful areas in his province.Advocate Mirza Mahmud Ahmad, the counsel for Sui Northern Gas Pipelines Limited and a director of Sui Southern Gas Company Limited, told Dawn on Monday that Mr Khattak had written to the Oil and Gas Regulatory Authority that it was difficult for his administration to do anything in the Kohat-Gurgury region.

A federal government official said that a chief minister was not authorised to write directly to Ogra, he could take up the matter only through the prime minister, the Ministry of Inter-provincial Coordination or the Council of Common Interests.

On the basis of the chief minister’s letter, Advocate Ahmad pleaded before a three-member panel of Ogra not to penalise gas companies for theft and gas losses.

Ogra Chairman Saeed Ahmad Khan presided over a meeting on a petition of the SNGPL for an increase of Rs35 billion in its final revenue requirement (FRR) for 2012-13 through a hike of Rs68.64 per unit in its prescribed prices.

He said when the KP government could not access the Kohat region and a major part of Balochistan was out of bound even for the army, it was illogical to expect employees of the gas companies to recover gas bills in such areas.

An Ogra official said the SNGPL counsel had argued that Ogra could not take such a decision without a public hearing even though the recovery was required under previous Ogra determinations cleared by the Lahore High Court and repeatedly stressed by the National Accountability Bureau.

Advocate Ahmad said the minimum monthly bill of a household was about Rs240 compared with Rs4,300 of those using kerosene and Rs4,700 for liquefied petroleum gas. The natural gas has become a fuel of the privileged class with 93pc consumers getting it at highly subsidised rate.

He said he did not support an increase in gas rates for poor lifeline households but for CNG and industries because the cost of alternative fuels used by them was at least four times higher than gas. Ogra reserved the determination for internal working, but analysts said that two members of the panel appeared inclined to accept gas companies’ demand for an increase in prescribed price for FRR.

Protesters block oil supply from Shakardarra

Source Dawn

The blockade of route used for transportation of oil from Shakardarra oilfields here continued on the second day on Sunday as the residents refused to end strike till provision of natural gas to their area.
A representative of SNGPL and officers of the district tried to persuade the protesters to end the strike, but they said that they would lift the blockade only when a responsible SNGPL or government official would give them a schedule for work on the gas project.
The elders of Shakardarra, where huge oil and gas reserves were found in 2001, had been setting deadlines for the government and the SNGPL to provide gas to the area according to the relevant law.
They said that former prime minister Zafarullah Jamali had directed the SNGPL in 2004 to provide gas to Shakardarra areas. Later, Chief Minister Ameer Haider Khan Hoti also issued similar orders in 2009 and 2011, which had no been implemented so far, they said.
Imtiaz Qureshi advocate told this correspondent by phone that they had set a five-day deadline for the SNGPL to announce work for provision of gas in villages where it was being produced.
Deputy district revenue officer Shahid Ali and a police officer also visited the place where the people had staged a sit-in to persuade them to open the route.
However, the protesters refused to do so unless they were given assurance of gas provision by a responsible SNGPL or government official.
They said that they were experiencing 20-hour loadshedding daily and the gas facility, which was their constitutional right, had not been provided to the area.
The residents said that they would continue their strike if their genuine demand was not accepted.

Ministry decides payment of 5pc bonus for oil, gas producing areas

Source Pakistan Observer

Ministry of Petroleum and Natural Resources has decided to grant production bonus to those districts where oil and gas reserves have been discovered, said White Paper 2011-12 of the Finance Department Government of Khyber Pakhtunkhwa for financial.

The funds will be spent through Petroleum’s Social Development Committees (PSDC) comprising MNAs Chairmen, MPAs Tehsil Taluka Nazims, district Nazim members, DCO (Secretary) of the district and two representative of the Exploration and Production (E&P) Company Member/ Vice Chairman.

Secretary of the PSDC (DSO) will open and administer a joint bank account with the title Petroleum’s Social Development Fund (PSDF), to be operated by District Coordination Officer and the Executive District Officer (EDO) Finance and Planning for the purpose of funding projects identified by the PSDC through the production bonus payable by the E&P Company.

All those E&P companies who are obligated to pay production bonus to the government for infrastructure development of the area will deposit the production bonus directly in the bank account of the Secretary (DCO) of the PSDF in consultation with the Director General, Petroleum Concessions (DGPC). The proceeds of first production bonus against Tal black of MOL was US $ 5,00,000 (Rs. 29.486 million), which had already been deposited in the account of DCO Karak and DCO Hangu during the year of 2008-09.

Second production bonus against the Tal Block of MOL was US $ one million (RS. 85.809 m), which had been deposited in the account of DCO Karak and Hangu amounting to Rs. 66.963 million and Rs.18.846 million respectively during the financial year 2010-11. Third bonus of US $ 1.5 million may become payable against the said block during next financial year of 2011- 12, the will be directly paid by the respective Exploration and Production (E& P ) company to the concerned Districts Governments under the existing guidelines of productions bonus.

The Provincial Government has also decided to transfer 5 per-cent shares of receipts on account of Oil and Gas receivable from Federal Government to the respective districts where well head of Oil and Gas are located. In this connection report of the committee headed by the Chief Secretary, KPK regarding utilization of 5 per sent share has been approved by the Provincial Cabinet. The said 5 per sent share will be over and above the size of District and Provincial ADP and will be utilized on Electricity, Supply of Gas, Education, Technical Education, Water Supply Schemes, Roads and Health facilities.

Utilization of 5 per cent share in the socio-economic condition of the area. For the financial year of 2010-11 a sum of Rs.225.185 has already been allocated and released to concern Districts i.e. Kohat and Karak as 5 per sent share of royalty on oil, gas Excise Duty on Natural Gas and Gas Development Surcharge. Moreover the last installment of Rs.42.071 million is also paid to Sui Northern Gas Pipeline from the provision of 5 per cent share from the current financial year for providing, gas facilities to the natives of the district Karak and Kohat which has approved by the Ministry of Petroleum and Natural Resources of the Federal Govt.

Beside Hydel resources, the Province of KPK has been blessed with large reserves of Oil and Gas. After 18th amendment Provincial Govt. has equal share with the Federal Govt. in all the forth coming production regarding Oil and Gas. Keeping in view the Eighteenth amendment Provincial Cabinet has given the approval of establishment of Oil and Gas Exploration Company. The company will be registered soon with the Security Exchange Commission of Pakistan and other relevant institutions.

After registration this company will be such as OGDCL, MOL and PPL in different blocks. In compliance with the decision of Peshawar High Court under Article 158 of the Constitution of Islamic Republic of Pakistan, all the commercial undertakings like CNG etc in the Province are exempted from loadshedding.

Energy and security go together —Naseem Ali Khan

Source Daily Times

The government is yet to realise that over the past one decade, the energy hub of the country has gradually shifted from the south to the north and the given regions alone are contributing around 10 percent and 35 percent, respectively, of aggregate indigenous production of gas and crude oil


In a country where, at present, nothing seems to be succeeding except the Taliban and narcotics smugglers, economic activity is poised on a very fragile structure, thus remaining vulnerable to even the smallest detrimental development. Therefore, what happened to a convoy of a foreign oil company in KPK near Kohat on January 20, 2011, though it got little coverage in the press, may cast a long shadow on the economy of the province and the country for a long time. On the given date, in broad daylight, a small convoy of the oil field workers was, reportedly, ambushed by a mob of 30 to 40 terrorists at the border of Kohat and Hangu districts during which six personnel, including four Frontier Constabulary (FC) guards, were brutally killed, and two workers of the Hungarian company MOL abducted. Not only that, in order to make it more gruesome, the corpses of two of the FC guards were burnt at the site by the terrorists.

As a result of the above incident, the said oil company has closed all of its operations in the area, resulting in curtailment of 40 MMSCFD (million standard cubic feet per day), around one percent of aggregate national production, of the much-needed natural gas. This, in turn, means greater load shedding of gas, more consumption of petrol, increased transportation tariffs and thus more import of petroleum products, which would consequently cause a further impact upon the already flagging economy. This is saddening, especially when the given field can contribute at least four billion rupees a year in terms of royalty and taxes alone, i.e. in addition to contributing directly vide its production of gas and oil and while the aggregate requirement of CNG for the whole north of the country is just around 30 MMSCFD. This scribe visited the area and found almost no signs of the writ of the state in wide stretches of land. Even where its presence was observed, it was quite rudimentary and weak.

All of this is happening in an area, which has gradually emerged as the backbone of the economy with respect to provision of energy security to the country. The government is yet to realise that over the past one decade, the energy hub of the country has gradually shifted from the south to the north and the given regions alone are contributing around 10 percent and 35 percent, respectively, of aggregate indigenous production of gas and crude oil. The given production, while on the one hand is proving greatly helpful in fulfilling the energy requirements of the country, on the other it is contributing at least 40 billion rupees annually to the national kitty in terms of royalty and taxes alone. This is in addition to the annual savings of around six billion rupees in terms of compression cost, which the pumping of corresponding volumes of gas from south to north would have entailed.

Another major sign of the state’s dwindling authority in the area is the fact that after the discovery of gas one can observe a whole network of gas supplies to local villages spread over hundreds of kilometers. Natural gas already stands supplied to around 45 villages and adjoining towns and the network is continuously spreading further as can be seen by any visitor to the area. However, Sui Northern Gas Pipelines Limited (SNGPL) — the pertaining utility company — has not been able to collect a single penny against domestic sales since their commencement. The lost revenue amounts to around 0.15 billion rupees per month, which would only grow with the passage of time if the state does not awaken soon to implement its writ.

It would not be out of place here to mention that a few months back an agreement was signed among the relevant stakeholders for the construction of a modern bridge at Khushalgarh to facilitate transportation of crude oil from the recent oil discoveries in KPK. Though the construction of the bridge was scheduled to commence months ago but, reportedly, some honcho in the planning commission has been sitting upon the required approval for unknown reasons for many months. This is despite the fact that the project of the new bridge has been in the government’s plans at least since 1985 but only reached this stage when two oil companies operating in the adjoining area offered to share its cost by at least 50 percent. And then we talk about facilitating investors.

All this is happening in a country and a province where, let alone any foreign investors, even its own entrepreneurs are reluctant to invest. In such circumstances any investor who is already there needs to be given all possible facilitation and protection, whereas the above-mentioned events seem to be leading in the reverse direction which may compel even such investors to reconsider their current status. Though quite pessimistic, but this is a realistic view of the situation.

With this state of affairs, how can one expect that the country can be driven onto the path of prosperity, success and development? I have heard that the given region alone has the potential to make Pakistan achieve the target of self-sufficiency in energy within a short period of three to four years; however, the same is subject to the provision of a safe working environment for oil and gas exploration and production companies. If this cannot be done, then we do not seem to be far away from observing the crumbling and withering away of even the last rudiments of our state structure in large parts of the country and their getting lost to lumpen elements for years to come. The process, sadly, already appears to be at quite a mature stage in many areas of the country, including Balochistan (which is almost half of Pakistan in terms of geography). But, with our nuclear arsenal and geo-strategic location, if we do not attend to the issues ourselves, would the international powers allow that to happen or choose to intervene, thus further compromising our sovereignty, is an issue that needs to be pondered upon.

KP to seek PM approval for new gas connections

Source Pakistan Observer

The provincial government of Khyber Pakhtunkhwa would seek the approval of the prime minister for provision of gas to the villages situated within the radius of five kilometres of the gas wells in southern districts of the province. This was decided in a meeting held here with Chief Secretary Khyber Pakhtunkhwa Ghulam Dastagir Khan in the chair.

The meeting besides others was also attended by the Chairman of the Cabinet Committee on Affairs of Oil and Gas in Southern Districts and Minister for Information and Public Relations, Mian Iftikhar Hussain, Minister for Housing, Amjad Khan Afridi, MNAs and MPAs of Kohat, Karak and Hangu, Secretary Home, Commissioner Kohat Division and authorities concerned of the OGDCL, SNGPL and MOL.

The purpose of the meeting was to discuss the provision of gas to the local areas and to remove obstacles in the way of implementation process in Oil and Gas sector in the southern districts of Kohat, Karak and Hangu. The meeting thoroughly debated the affairs related to the oil and gas sector and all the stakeholders presented their point of view in detail.

Lack of security hampering oil, gas exploration in Tal Block Kohat

Source Dawn

The Hungarian Exploration Company MOL and Oil and Gas Development Company (OGDCL), which are operating 19 wells in the Kohat division as part of the Tal Block, still feel unsafe and are at the mercy of extortionists even after being involved in the region for more than a decade.

The Tal Block contracted to these companies by the government in 1999 and 2001comprises Kohat, Hangu, Karak, Orakzai Agency of Kohat division, Bannu and parts of Waziristan Agency.
The region is teaming with unbridled criminals who have for centuries made large swathes as no go areas where their main source of income is kidnappings for ransom and drug trafficking.
Only recently, rouge elements attacked OGDCL facilities and vehicles and occupied the company`s new Sheikhan site, forcing the OGDCL to suspend its production on different points in Kohat district.
Influential people and landowners often forcibly stop the oil and gas exploration work demanding jobs and extra cost of their land used by the company.
Mushfiq Paracha, the regional chief who administers whole Khyber Pakhtunkhwa and parts of Punjab, told this correspondent on telephone that some of the matters concerning recent incidents had been resolved. But the safety of the installations and the staff required much more security.
The MOL company officials have requested the commissioner Kohat division, Khalid Khan Umerzai, at several meetings held in recent months to provide the staff and installations with security especially after kidnapping of their staff and firing incidents. They also demanded elimination of the criminal gangs who pose constant threat to their installations.
A one such meeting was held on Thursday. But the MOL officials in Kohat and Islamabad, when contacted, refused to comment only saying that they were not allowed to speak about such matters.
A couple of months back unknown criminals attacked a vehicle of the MOL company and kidnapped its official Fayyaz Khattak. The incident occurred in Sarki Mela area between Kohat and Hangu districts. The MOL operates 10 wells of oil and gas in the region and is also assessing new reserves at sites in Hangu district.
Officials of both the companies and police said that extra troops of Frontier Constabulary and police check posts had started functioning after a long period of negotiations in view of the extreme vulnerability of the national and foreign companies to the criminals. The interior ministry had sanctioned extra platoon of FC, establishment of two posts and round the clock patrolling of the region. But the situation is still far from safe.

New gas found in Kohat

Source Daily Times

A new gas discovery was made after 4,800-metre deep drilling in Kohat, official sources said on Monday.


“The new gas discovery was made last week,” sources wishing not to be named, told Daily Times, adding that the discovery is likely to ease the country’s energy needs.

According to the sources, the discovery was made 18 kilometres inside the Khyber Pakhtunkhwa province from its border with Punjab. “The well is situated in the Gumbhat area near the Khushalgarh Bridge,” the sources added.

The Hungary-based exploration company MOL has discovered the gas and hopes the discovery will provide the country with another huge energy reservoir to meet the growing energy needs.

Huge gas and oil discoveries were made in Kohat, Hangu and Karak districts and experts believe future exploration would also yield “good results” as a study shows such discoveries could be made in Dera Ismail Khan district in Khyber Pakhtunkhwa and the Zhob district in the Balochistan province.

An American exploration company, the sources revealed, had made such an attempt in 1993 at the same place but failed to make the discovery. “The target for discovering gas was 3,400-metre deep drilling,” they said.

“However, the engineers continued the drilling when no discovery was likely at the 3,400-metre deep drilling. It was the most difficult exploration as the area lies close to a fault line.”


The country is getting gas and crude oil from the Tall Block and hopes are that the region is full of natural resources to meet the increased demand for energy.

“How big the reservoir at this well is will be measured soon. We hope it will serve the country’s needs for decades before we make more gas and oil discoveries,” MOL officials said.

MOL Pakistan suspends operations on Maramzai oil and gas well

Source Daily Times

MOL Pakistan has immediately suspended production operations on the Maramzai oil and gas well after its convoy was ambushed near Kohat last evening.


In a statement issued here, the management of MOL with profound grief announced the death of six persons including four FC guards, one contractor driver and one local labour as its convoy was ambushed by unknown miscreants on the way back to Central Processing Facility (CPF) from Maramzai site on Thursday evening.

The miscreants also abducted two people one driver and one specialist from contractor as one guard sustained injuries when firing ensued.

MOL Pakistan has immediately suspended production operations on the Maramzai due to security concerns resulting in suspension of 40 MMSCFD gas and 1600 barrel oil per day production and has withdrawn all personnel from the well site forthwith in order to avoid any further human loss.

Janos Feher, Managing Director of the company in his condolence message to all company employees and bereaved families expressed profound grief over this unfortunate development. “We all wish we could undo what happened and bring those back who embraced martyrdom in the line of duty,” he said. The Managing Director stated a strong demand has been put forward to the federal and provincial government to provide safe and secure working conditions and requested the government to take all necessary measures for the timely release of abductees.

On October 15, 2009, MOL announced that it had made a new (forth) discovery of gas and condensate on Maramzai-1 well in the Tal Block, located in the Northern Western Frontier Province of Pakistan. The production of Maramzai-1 well is 1.1 million cum/day (38.3 MMscfd; 6.4 th boe/day) gas and 228 cum/day (1,434 bbl/day) condensate at 220 bar (3,197 psig) flowing wellhead pressure through 48/64” choke. The production rates can improve further after acid stimulation of two limestone reservoirs in the well. After that the consortium will be conducting further extended tests to evaluate the size and economic potential of the reserves. Further information will be provided in due course.



Hydrocarbon exploration has been carried out in this block since 1999 by a consortium of companies including Oil and Gas Development Co. Ltd (OGDCL), Pakistan Petroleum Limited (PPL), Pakistan Oilfields Ltd (POL) and Government Holdings (Pvt.) Ltd (GHPL) with MOL as an Operator of this Joint Venture. MOL has a 10% interest in the consortium.



Exploration activity resulted in the first discovery (Manzalai-1 well) in December 2002. After seismic acquisitions performed in 2003 the consortium decided to drill a new exploratory well (Makori-1 well) in 2004. The drilling was successful; MOL announced the discovery in January 2005. MOL made its third discovery of gas and condensate in the Tal Block (Mami Khel-1 well) in March 2008.



Zoltán Áldott, Exploration and Production Executive Vice President of MOL had termed this as “This discovery has further strengthened our confidence in the potential of the Tal block, which already is seen as a major source of energy for Pakistan in the future. Due to the already existing infrastructure this well will be put on production on a fast track by summer 2010.”

Women protest low gas pressure

Source Dawn

A large number of women on Tuesday blocked the main city road to protest against suspension and low pressure of gas in KDA Town.




Enraged by suspension of gas in the morning and persistent low pressure for several weeks the women gathered outside the town and blocked the main city road for about an hour.



When DSP Ehsanullah reached there for negotiations the protesters insisted that they wanted the SNGPL officials to come and give them assurance that gas load shedding would be ended soon. The police brought the SNGPL officials who promised to solve the problem of low pressure within 15 days. Afterwards, the women ended their protest.



The protesting women complained that their children and spouses had been going to schools and offices without breakfast for the last few days.



The women said that they had to buy food from hotels for breakfast and dinner because they could not cook at home due to the low gas pressure.



Earlier, an emergency meeting of Kotal Welfare Organisation (KWO) was held in a mosque of Sector 4 of KDA, which issued a two-day deadline to the SNGPL for resolving the issue of low gas pressure.

Rs80m released for Karak gas supply scheme’

Source The News

Khyber Pakhtunkhwa Assembly member Mian Nisar Gul Kakakhel on Saturday said the provincial government had released Rs80 million for the supply of gas to Karak tehsil and Takht Nusrati area. Addressing a public meeting here, he said the government had also decided that 50 percent amount of royalty of oil and gas would be spent on the development of Banda Daud Shah tehsil. He said that work on gas supply to six villages in Karak tehsil including Mithakhel, Thordhand, Ghundi Mir Khankhel, Badinkhel, Turkikhel and Alikhel would be started soon. He added that entire village of Mithakhel would get the gas facility as 12-kilometre-long gas pipeline had been approved for the village. The MPA informed that the oil and gas exploring foreign company MOL has released Rs60.5 million as production bonus for the uplift of the area and added that drinking water supply schemes would be launched on priority basis to meet the longstanding demand of the people of Band Daud Shah tehsil.

Gas deposit found in heart of Kohat town

Source Dawn

A bit of good news for the energy-starved nation — the state-run Oil and Gas Development Company Limited (OGDCL) has discovered significant natural gas reserves in the heart of Kohat city in Khyber Pakhtunkhwa.


According to a statement issued by the company on Friday, the discovery was made during exploration of Shekhan well-1 which produced 15 million cubic feet of gas (MMCFD) through 32/64 inch choke size at wellhead flowing at a remarkable pressure of 2,500psi.

Drilling on the premises of Kohat Development Authority is reported to have produced high quality natural gas with 96 per cent methane and 1,041 British thermal unit (BTU) per cubic feet of heating value.

A company spokesman said the discovery was made in the third week of June at Lumshiwal, one of three formations identified by technical experts for drilling.

Two more formations to be explored over the next few months are expected to produce more gas and may yield even better results.

Operated by OGDCL, Kohat Exploration Licence is a joint venture of Tullow Pakistan, Mari Gas Company and SAIF Energy Limited.