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Legal cover for petroleum policy on the anvil

ASIF FAROOQI

ISLAMABAD: The government has decided to revive the Economic Reforms Act, 1992, with minor amendments to give comprehensive legal protection to the Petroleum Policy, Business Recorder has learnt on authority.

The decision has been taken to fight lack of investor confidence in government policies with regard to the energy sector. "Reactivation of the Act is aimed at rebuilding confidence of the investors that the government would fulfil all its commitments made in the petroleum policies of '94 and '97," well placed government sources said.

A severe dispute between federal government and gas exploration companies on the pricing of newly discovered gas marred investment in the sector during the last few months, as the investors started feeling threatened that the government might continue to deviate from the petroleum policy on other grounds as well.

"The Economic Reforms Act would ensure that the policies agreed with the gas companies remained unchanged over the years and are not affected by any change in the government," officials said. They denied that the government was aiming to extend "IPPs-like sovereign guarantees" to the gas companies.

The government is contemplating to bring this amended Act to life within one month. "The proposal is with the Ministry of Finance which is looking for the modus operandi to be adopted to revive the Act," the sources said, and added that one of the options is to promulgate a Presidential Ordinance for reactivation of the said Act. However, the Finance Ministry seems more interested to make it part of the finance bill. "For that purpose too, an Ordinance would have to be issued, temporarily," the officials said.

They claimed that investors from the gas sector were invited by the Petroleum Concessions Department of the Ministry of Petroleum, to gather as to how investment environment in the gas sector could be made more secure for the investors.

"The investors agreed on reactivation of the Economic Reforms Act which they think is a comprehensive document to cover loopholes in the government policies," the officials added.

Secretary, Ministry of Petroleum and Natural Resources; director general, Petroleum Concession; director general, Gas; and other senior ministry officials have been involved in the discussions with the investors on the issue.

Federal Minister Usman Aminuddin had announced in his maiden press conference that the government was working on proposals to rebuild investor confidence in the energy sector.