The Cabinet’s Economic Coordination Committee (ECC) has authorised the transfer of M/s MOL’s 30% operating interest in the Margalla Block to Mari Petroleum Company Limited (M/s MPCL).
MOL Pakistan is a wholly owned subsidiary of the Budapest, Hungary-based MOL company and has been doing business there since 1999. Exploration, mining, and crude oil production make up its primary business. In order to develop oil wells, the business claims to have conducted seismic investigations on two Pakistani blocks: the TAL block in Kohat and the Margalla block.
MOL approved a licence extension application for the Margalla Block earlier this year. Pakistan Petroleum Exploration and Production Rules 2001 regulate the Margala Block. The rules of Pakistan Petroleum (E&P) Rules 2001 require the government’s prior approval for any such assignment to a company “A petroleum right or any working interest therein shall not be assigned without the previous consent in writing of the government.”
Today’s ECC of the Cabinet meeting was chaired over by Senator Mohammad Ishaq Dar, the federal minister of finance and revenue.
According to sources, the Pakistan Mari Petroleum Company Limbed (MPCL) was requested to get a 30 percent operating stake in the Margalla Block from MOL during the ECC meeting. Both the assignment request and the draught Deed of Assignment (DoA) adhere closely to the guidelines of the relevant regulations.
With a market value of Rs 250 billion, MPCL now produces 852 BOPD of oil and 761 MMCFD of gas. It is one of the several businesses owned by Pakistan’s Fauji Foundation. Once this assignment is granted and the acquiring business is given the authority to retain the margalla exploration licence, the performance guarantee will be purchased from MPCL. Except for the Rs. 27 billion in indexed rentals that are subject to litigation in the Sindh High Court, M/s MOL has satisfied all outstanding financial commitments.
The ECC also took into account a summary from the Ministry of Maritime Affairs and approved a Technical Supplementary Grant in Aid of Rs. 822.750 million, allowing the Gwadar Port Authority (GPA) to pay 3291 fishermen who are registered with the Balochistan Fisheries Department for the purchase of boat engines in the amount of Rs. 250,000 per head.