More Incentives Needed to Speed-Up Oil/gas Exploration
Shah, Saleem, Economic Review
We still need to encourage gas exploration in Pakistan and that can be through gas price incentive. Exploration of gas in the past was not a well attracted proposition for exploration companies and it is only 2-1/2-3 years back that it was realised that how much gas exploration is important for us.
Mr. Abbas, Chief Representative, the Attock Oil Company Limited and Pharaon Group in Pakistan, while giving his assessment and comments on the new Petroleum Policy said that this policy is part of Government's integrated energy development plan which has been recently announced. Though it is very well known that oil, gas and other natural resources like coal and water play a very vital role in any country's development and economic growth but unfortunately Pakistan is still lagging far behind in the development of Petroleum and Natural Resources sector while comparing with many other developing countries progress in this field. No Government can afford to ignore this sector being the main contributor in the development and growth of economy of a country. The Government in power has to and must give top priority to this sector, treating it as an integral part of energy plan, which has been done this time. Over the period in Pakistan depending upon Government in power's priority for this sector, work has been going on for the development and growth of oil, gas and natural resources sector but without achieving the desired results and that is because of various reasons. One of the main reasons which I feel is that until 5 to 6 years ago formation of policy was only the job of the Government, meaning thereby, the Ministry and its bureaucratic net-work, without active participation of private sector. Thus in those days formulation of policy being the Government's prerogative, neither the new ideas, views nor the visions of private sector were ever seriously accommodated in that work. The other reason was that on the implementation side instead of carrying along private sector as a partner in the field, it was one sided Government's dictated policy and decisions.
Though the above mentioned two reasons were very important, but were ignored; therefore, not much headway could be made in achieving results. One always learns through experience and that is very true in the present situation when it has been announced that Policy will be implemented in its letter and spirit. Both energy related ministries will be monitoring the progress to the CCE - Cabinet Committee on Energy, the supreme body constituted specially for this purpose. I am sure that it also meant carrying along private sector in implementation as it has been done while formulating the policy. For committed implementation of Energy Policy package, red-tapism and bureaucratic snags will have to be completely removed. Over the period the positive noticeable change has come and now the private sector - oil exploration, drilling companies and their representative associations are extending more and more cooperation to the Ministry of Petroleum and other concerned Government agencies. This will definitely lead to achieving improved results. Since private sector has been recognised as partner and a major player in the game of National Development Economic growth, it has, therefore, started responding in a very positive manner.
Despite announcement of further initiatives, still we have to make Pakistan competitive internationally in this field. Exploration and production terms have to be less onerous with minimum participation of the Government at exploration phase. Regulatory and operating environment for major foreign oil companies to come, have to be further improved. Government must seriously consider reducing its active participation in oil/gas exploration and petroleum refining sector. This will allow private sector to take over the major business of this sector and will start bringing positive results in the larger national interest. In any developing country the first step towards the development and economic growth is recognition of the private sector's role and let it work with freedom and full responsibility. …