After receiving no objection from the Office of Attorney General for Pakistan (AGP), the government has decided to revive 11 revoked petroleum exploration licensees. The framework for revival of revoked licensees through out-of-court settlement was submitted for consideration and approval of the ECC on October 27, 2022. This has been decided to make these settlements out of the court.
In total, eleven exploration licenses were revoked due to non- performance of work commitment and non-payment of financial obligations by various exploration and production companies (E&P Companies). In all the 11 blocks, status quo order was passed by the respective Civil Courts, Islamabad and Sindh High Courts. The cases were being pursued in the respective courts for early decisions. According to Petroleum Division, under the Pakistan Petroleum (Exploration and Production) Rules, the Federal Government/ authority grants exclusive petroleum Exploration Licenses (EL) for petroleum exploration for an initial period of five years generally through competitive bidding process against work program/ units. The Rules has also empowered the Government/ authority to revoke the ELs if a holder of a EL has contravened any material terms and conditions of the license including non-performance of committed work program during the time stipulated in license, as well as, non-payment of financial obligations such as social welfare, training, rent, production bonus. The settlement efforts would be without prejudice to ongoing litigation which would be pursued until a settlement was achieved. Further, the framework was not meant to change any policy provisions of the relevant Petroleum Policy but rather a settlement of dispute among the parties to the contract (exploration license and the petroleum concession agreement), under the provisions of the petroleum rules.
