The petroleum ministry has held the Oil and Gas Regulatory Authority (Ogra) responsible for the recent fuel crisis in the country.

In a report submitted to the petroleum minister, the office of director-general for oil said that Ogra failed to perform its duty as a regulator as it did not take timely action to head off a crisis. Ogra’s ineffectiveness resulted in black marketing of petrol and diesel in many parts of the country.

Sources in the ministry said Ogra was supposed to take steps to ensure availability of petrol across the country not only by taking measures against hoarders and black marketers but also through timely imports to meet the shortage created by the shutdown of Parco due to floods.

“The Ogra teams did nothing other than to send show-cause notices to oil marketing companies (OMCs) during the crisis and to wait for the replies to such notices,” an official said.

Petroleum Minister Syed Naveed Qamar is expected to forward the report to the Prime Minister’s Secretariat because Ogra falls under the administrative control of cabinet division.

The report added that the petroleum ministry dispatched teams to various places to examine the availability of petrol at the designated retail outlets.

Meanwhile, the recent fuel crisis has served to sharpen the differences between the ministry and the regulator.

A ministry official alleged that senior officials of Ogra drew heavy salaries (up to Rs400,000 per month) but they hardly did anything for the benefit of the industry or the consumer.

“The situation was better when the OCAC was directly monitoring the supply situation in the country,” he claimed.

Officials of Ogra declined to comment over the report or the supply position in the country.

From Dawn News

The government is facing difficulties in unloading oil consignments from ships because of port congestion and infrastructure limitations, resulting in supply shortages in flood affected areas of Sindh, Khyber Pakhtunkhwa and Northern parts of the country.

Sources in the petroleum ministry told Dawn on Monday that the country’s oil consumption had dropped by about 50 per cent after the recent floods as transport activities had substantially slumped because of damage caused to the road infrastructure.

They said the stocks of petroleum products diesel, furnace oil and petrol were enough for more than 28 days of the country’s usual requirement but transportation problems were resulting in short supplies in many parts of the country, particularly in Sindh and Gilgit-Baltistan.

A senior government official said that because of supply disruptions, there were reports of overcharging and artificial shortage by the private petroleum dealers in many areas where stocks were more than enough for the local consumption.

He said the petroleum ministry issued a directive on Monday to the provincial governments and Oil and Gas Regulatory Authority (Ogra) to take note of the situation and conduct raids on petrol pumps to ensure smooth sales and sufficient stocks of petroleum products.

He said the provincial governments and Ogra had also been asked to seal premises and impose fines on dealers who were engaged in short supplies or overcharging customers.

The sources said at least four ships loaded with furnace oil petrol and diesel were waiting for unloading at the Karachi port.

He said a number of locations along the Indus Highway in Sindh including Shikarpur, Kashmore and Jacobabad could not be supplied with petroleum products because of heavy floods and inundation of roads and other infrastructure facilities.

Likewise, oil supplies in Gilgit-Baltistan and Khyber Pakhtunkhwa were also facing shortages of petroleum products due to heavy damages to roads, bridges and allied transport network. They said the government initially considered to airlift petroleum products in these areas but was now finding it difficult to access such locations even through helicopters.

[via DAWN News]

Federal Minister for Petroleum and Natural Resources on Friday told National Assembly that the government was making serious efforts to end the load shedding of gas from next year. During question hour, he informed the house that the government was giving incentives to the oil and gas exploration companies for ending load shedding from the country.

Pakistan and Iran are expected to sign an agreement on Iran-Pakistan (IP) Gas Pipeline Project in Turkey during March 8-10, 2010. After signing of the project between the two countries, it would be completed within a period of 3-4 years. This would resolve all issues relating to gas load shedding in the country due to smooth supply of gas from Iran on regular basis, he added.

Responding to a question, he said the government is working on a project to import Liquefied Natural Gas (LNG) to meet the domestic requirements. It would also be instrumental in checking shortage of gas. He said that the load management of natural gas was formally observed for the first time on December 1, in 1982. However, due to lack of proper planning in the past the problem could not be resolved. Load management of gas could only end permanently after matching of supply and demand.

The strategic fuel reserves have alarmingly dwindled to just seven days for thermal powerhouses, and the government-owned oil marketing company, the Pakistan State Oil (PSO), is virtually penniless now as its outstanding dues, which mainly power sector owes to it, have surged to over Rs100 billion.

“The furnace oil reserves have fast depleted to just seven days from 25 days. If this situation continues, the whole country would plunge into darkness after one week,” a senior official at the Petroleum and Natural Resources Ministry told The News.

“The PSO has written three letters in latest correspondence, each to the Finance Ministry, the Petroleum and Natural Resources Ministry and the Water and Power Ministry intimating them about the appalling oil reserves stocks and its fiscal constraints, which are impeding the import of further fuel in the country,” the official added.

It is pertinent to mention that the PSO has scrapped the import of fuel oil tender because of cash constraints. The public sector oil marketing company in a letter to the Pepco written on February 9 says the entire oil import plan has been disturbed because of the unavailability of the required liquidity.

The letter says if the Pepco does not arrange substantial amount (at least Rs 25 billion) to clear the dues, the PSO will be forced to scrap the tenders. Refineries, which are running under the production capacity by 45 to 60 per cent in the wake of liquidity constraints, have also suspended the supply of products to the PSO as their outstanding dues have jacked up to the whopping figure of Rs 62 billion.

Via: The News

The Oil & Gas Pakistan Forum 2010 with special emphasis on “Solutions for Sustainability – Pursuit for Steadier Markets” concluded in Islamabad today with speakers providing perceptive insight. Experts stressed on the need to capitalize on the enhanced stability in the global Oil & Gas business, pledging a realignment of policies for a robust future and a collective strategy to recover from the setbacks of the previous years and the need for technology as a driver for future oil and gas initiatives.

More than 300 delegates from government, regulatory bodies, prominent oil & gas companies, stakeholders, members of the Diplomatic Corps and media attended the day-long conference supported by the Petroleum Ministry, MOL Pakistan, Eastern Testing Services and other partners.

The Federal Minister for Petroleum and Natural Resources, Syed Naveed Qamar delivered the Keynote Address, in which he highlighted the most attractive features of the liberal Petroleum Policy and urged the local and foreign E&P companies to proactively enhance their activities and investments in Pakistan for higher productivity. He assured the forum of his complete support and the government’s resolve to protect their interests. Mr. Mehmood Saleem Mehmood, Secretary Petroleum was also present.

Mr. Janos Feher, Chairman, Pakistan Petroleum Exploration & Production Companies Association (PPEPCA) stressed the need for a collection strategy to achieve sustainability and build a steadier, safer and productive market for the oil and gas sector in Pakistan.

Mr. Menin Rodrigues, Chairman of the Conference & CEO of SHAMROCK Communications (Pvt.) Limited in his opening remarks appreciated the efforts of the sector specialists and emphasized the emerging opportunities and challenges in this evident phase of stabilization in this industry across the globe.

Well researched Papers were presented in the various sessions to discuss critical topics including; Regulatory Framework, Incentives, Opportunities, E & P Infrastructure, Business models, Geopolitical Issues; Depleting Reserves, Alternate Energy and Impact of Prices on Economies and an outlook of global perspective. The sessions were chaired by distinguished personalities like; Mr. Saquib Mohiuddin, CEO, Business Support Fund, Ministry of Finance; Mr. Tauqir Sadiq, Chairman-OGRA and Mr. Rune Stroem, Country Director-Asian Development Bank.

The eminent speakers included Janos Feher, Chairman, Pakistan Petroleum Exploration & Production Companies Association (PPEPCA), Dr. Shahab Alam, Director-Petroleum Ministry; Tashfeen Qayyum, CEO, Eastern Testing; Shahrukh Kiyani, Manager Projects, Mari Gas Company Ltd., Sohail Kiani, President-SARF Canada, N.A. Zuberi, Executive Director, Private Power Board; Abbas Bilgrami, Managing Director, Progas and Samir Ahmed, Managing Director, National Commodities Exchange Limited (NCEL).

Mr. Rune Stroem, Country Director Asian Development Bank, gave an indepth overview of the global and regional oil and gas sector opportunities against the backdrop of economic conditions in the respective areas. He said, “Pakistan’s energy issue was a financial issue”. Concluding the conference Dr. Gulfaraz Ahmed, Former Secretary Petroleum eloquently stressed a restructuring of the energy infrastructure with the involvement of professional talent and to harness the country’s vast reserves of natural gas. The conference ended with a vote of thanks and appreciation to the organizers for a well-managed conference

Crude Oil and Silver Futures contracts were successfully executed at National Commodity Exchange Limited (NCEL), Pakistan’s only regulated and technologically advanced platform. The newly introduced commodities are attracting volumes with Crude Oil 100 barrel futures contract amounting to US $ 615,952 (PKR 52 million) and Silver 500 ounce futures contract observing trades worth US $ 72,911 (PKR 6 Million) during the last week.

Mr. Samir Ahmed, Managing Director NCEL said “These international, US Dollar-denominated contracts now allow direct linkages to the international markets eliminating the exchange rate risk and allowing investors a pure play on commodity price itself. The contracts will add further depth and liquidity to the NCEL platform and create opportunities for new trading and advanced hedging strategies. The listing of these contracts marks an important milestone in this phase of growth for NCEL”.

NCEL is a gateway to an electronically transacted marketplace, with trading, central party clearing and settlement facility; where customers continue to rely on liquidity, price transparency and ensured settlement. The exchange is a reliable and secure platform boasting increased retail and institutional investor demand for over the counter trades and mitigating the risks of counterparty default. This provides effective hedging tools for trade, industry and other market participants who may be exposed to energy and precious metal price risks.

According to Ms. Raheela Khan, Senior Manager at NCEL, the exchange is currently providing trade facilitates in Gold, Silver, Crude Oil, IRRI-6 Rice, Palm Oil and Interest Rate Futures. “During 2009, total rupee traded volume touched 28,029,469,905 with a total of 86,883 contracts reflecting a year- over- year growth of 4485%” informed Raheela. She further pointed, Dec 09 was an exceptional month with a 5.3 billion rupees monthly volume, setting a daily average traded value of 300million rupees and marked the highest ever day trade volume record of 1.29 billion rupee. NCEL volume growth has been phenomenal in 2009 breaching ISE and nearing LSE volumes, however, volumes were mostly concentrated in gold.

In 2010, these volumes are to grow substantially with growing institutional investors and several agricultural, metals, and financial futures contracts to be listed. These new electronically-traded contracts are offered continuously for 20 hours a day from 10am to 6am, five days a week. NCEL is Pakistan’s first and only demutualised exchange with a 100% institutional shareholding. It has 290 members spread all over Pakistan.

Fore more details visit: www.ncel.com.pk or call 111-623-623

ABOUT: National Commodity Exchange Limited (NCEL) is the first technology driven, de-mutualized, on-line commodity futures exchange in Pakistan. NCEL’s shareholders are Karachi Stock Exchange, Lahore Stock Exchange, Islamabad Stock Exchange, Pak Kuwait Investment Company Limited, Zarai Taraqiati Bank Ltd and National Bank of Pakistan (NBP) and it is regulated by Securities and Exchange Commission of Pakistan. NCEL is committed to providing a world-class commodity futures trading platform for market participants to trade in a wide spectrum of commodity derivatives, driven by best global practices, professionalism and transparency. For more information: www.ncel.com.pk

The Pakistan government is offering investors in the Emirates its stakes in nine corporations, including the country’s largest lender and its biggest oil and gas exploration firm, as it seeks to reduce debt.

Officials from Pakistan’s privatisation commission along with JP Morgan, the lead manager on the project, recently concluded a series of presentations to investment houses including the Abu Dhabi Investment Authority, one the largest sovereign wealth funds in the world, as well as Emirates Investment Authority, Abu Dhabi Investment Corporation and Invest AD.

“Eventually the government will sell all its shareholding,” said Waqar Ahmed Khan, the privatisation minister. “We are doing the number crunching, developing baseline formulas and doing evaluations for a number of projects.”

The holdings in the first batch of companies are expected to be sold within the first half of next year, he said.

The government may sell its holdings in firms including the National Bank of Pakistan, which has assets of more than US$10 billion (Dh36.73bn).

Oil and Gas Development Corporation and Pakistan Petroleum, two oil and gas exploration companies, the energy firms Faisalabad Electricity, Kot Addu Power and Jamshoro Power, Pakistan Post Office and State Life Corporation of Pakistan, the country’s biggest life insurer, are also on offer.

The government is also offering its remaining 42 per cent stake in Habib Bank. The Agha Khan Fund for Economic Development owns the majority stake in Pakistan’s largest private commercial bank.

Via The National, Abu Dhabi

Pakistan government has raised the petroleum oil products’ prices by an amount ranging from Rs 4.37 per litre to Rs 5.61 per litre in the country for the month of December 2009.

Accordingly Oil and Gas Regulatory Authority has notified new prices of various petroleum products including petrol, kerosene oil, Light-Diesel Oil (LDO) and HOBC here on Monday, while the oil marketing companies (OMCs) have released the increased price of high-speed diesel (HSD) as it is a deregulated product.

The Water and Power Ministry has received an appalling 15.6 percent of total budgetary allocation for the first quarter of the current year, an amount that flagrantly disregards the critical contribution of this ministry to not only national output, but also to serious issues of households-related to water and power deficiency in the country.

The Finance Ministry provided Rs 2.8 billion during the first quarter (July-September) of 2009-10 financial year to the Water and Power Ministry as against the total committed quarterly allocation, amounting to Rs 17.85 billion. During three-day PSDP review meeting held recently, the Finance Ministry gave top priority to the Ministries of Petroleum and Natural Resources, Pakistan Nuclear Regulatory Authority (PNRA), Ports and Shipping, Communication, Population, Pakistan Atomic Energy Commission (PAEC) and Health Ministry.

The Ministry of Petroleum and Natural Resources received 85 percent of the budgetary allocations, amounting to Rs 170 million as against the request of Rs 200 million in the first quarter.

The Finance Ministry gave second priority to Pakistan Nuclear Regulatory Authority (PNRA), which received 75.1 percent of the committed funds, amounting to Rs 82.5 million as against the committed amount of Rs 109.8 million in the first quarter. The Ministry of Ports and Shipping received 72.2 percent fund releases, amounting to Rs 16 million as against the requirement of Rs 22 million in the first quarter.

Via Business Recorder

Despite the economic recession, the demand for oil has gone up. As reported by Business Recorder, this rise is  mainly due to consistent rise in furnace oil demand and sharp recovery in diesel sales.

Pakistan State Oil (PSO) was the star performer in this month with stunning 44 percent oil sales growth to 1,321,000 tons due to efficient volume handling by the company. The company supplied 31,000 tons of FO per day to the thermal plants in August 2009 compared to 19,000 tons in August 2008. The PSO’s market share in furnace oil sales has increased to 90 percent in August.

According to OCAC data, Shell’s oil product sales increased by 12 percent to 226,000 tons while the sales of APL declined by 7 percent to 90,000 tons in this period. “To improve electricity generation through existing power plants, a committee was constituted on July 21, 2009 which instructed PSO to supply 35,000 tons of FO to power generation companies and this was the main reason that FO sales grew massively,” Farhan Mahmood, an analyst at JS Global Capital said. The diesel (HSD) sales also recovered sharply posting 26 percent volumetric growth during the month, led by gradual improvement in trade activities on the back of overall economic recovery, he added.

The PSO’s FO and diesel sales grew by 63 percent and 22 percent to 777,000 tons and 402000 tons, respectively. “With the recent long-term fuel agreements with Pepco and the company’s commitment to provide monthly 35,000 tons of FO to power plants during peak season, we expect FO sales of the company to reach 9 million tons in FY10 compared to 6.9 million tons in FY09,” Farhan said. Moreover, resolution of the circular debt will improve liquidity in the energy chain and hence improve OMCs ability to pile oil stocks, he added.