The federal and Balochistan governments have not being able to reach an agreement on the province’s demand for a share in lucrative dividends offered by oil and gas explorer Pakistan Petroleum Limited (PPL).
A representative of the Balochistan government came up with the demand in a meeting of a working group held on November 11 to resolve issues pertaining to extension in the lease contract for Sui field, say officials aware of the development.
However, the director general of petroleum concession countered that such a proposal was not covered by rules and the policy.
An official of the Finance Division suggested that the province could buy PPL shares at market price as done by the central government, but it did not win the nod of Balochistan.
PPL operates 26 exploration blocks and has stakes and working interest in 17 other blocks. The energy secretary of Balochistan desired to know details of the acquisition of shares in Sui/Burma Oil Company in the next meeting.
The working group was set up following protest by the Balochistan government over extension in the mining lease contract for Sui field by the federal government.
The centre has granted a one-year extension in the mining lease for Sui, which is in Balochistan and meeting needs of gas consumers for over six decades.
In a meeting on October 7, Petroleum and Natural Resources Minister Shahid Khaqan Abbasi, however, clarified that notwithstanding any provision of the constitution and its interpretation, the federal government wanted to take Balochistan into confidence while arriving at a final decision on extending the Sui mining lease.
He said the extension decision was taken on the last day prior to expiry of the lease and that too was only for one year in the larger national interest as an interim arrangement to avoid disruption in gas supply.
“This interim arrangement will remain in place only until the resolution of outstanding issues,” he remarked.
Abbasi assured Balochistan of maximum cooperation and facilitation in reaching a sustainable solution and finding a way forward according to the Constitution of Pakistan and applicable laws and rules.
Reposing trust in policies of the federal government, then Balochistan chief minister Abdul Malik Baloch stressed that the provincial government would reciprocate in the same manner.
However, he insisted that constitutional rights of the province should be safeguarded and protected. He was of the view that extension in the Sui mining lease should not have been granted without prior consultation with the province.
Instead of taking such steps, the chief minister said he would prefer engaging the provincial cabinet and the assembly to arrive at a final decision in a democratic manner.
“Though I don’t agree with the interim extension in the mining lease, the government of Balochistan does not want to create hurdles or disrupt gas production and desires an amicable and workable way forward,” he remarked.
The chief minister suggested that the issue of mining lease would only be discussed with a representative of the federal government and not with the field operator, PPL.
He proposed that a working group should be constituted comprising representatives of the federal and provincial governments. He also called for holding regular meetings of the committee to come up with a solution. The working group will frame recommendations for consideration of the respective governments.
The chief minister proposed that Balochistan’s representative in the PPL board of directors should be a nominee of the province to ensure that its rights were protected and ensured. “Balochistan only wants what is rightfully its share under the constitution,” he said.