Sindh’s rich Off-shore Oil and Gas Resources

Translation by Khalid Hashmani, McLean, Virginia

Excerpts;

Once again, Ishak Soomro shares his research, concerns and warnings on another important natural resource of Sindh that remain largely unknown to the common people of Sindh. His bold article on the off-shore resources of Sindh was printed in Sindhi Daily Ibrat Feb 10, 2010.

According to the article, Pakistan Government has allotted 18 exploration licenses to five (5) multi-national oil companies. The awardees include British Petroleum (BP) which has a dubious record of spending its civil society commitments to please bureaucrats and local chieftains instead of improving conditions of local communities. Other companies include Italy-based ENI, Canadian company called Niko, and Pakistani companies OGDCL and PPL. Mostof these companies already operate on-shore oil and gas fields in Sindh and have checkered records on meeting the commitments on their already profitable on-land oil and gas producing fields. It must be noted that exploring off-shore fields poses greater risks to coastal communities as these activities often destroy livelihood of local fishing families.

Recently a new milestone was reached when ENI and PPL were given go-ahead with drilling of off-shore wells. The plan calls for the first oil/gas production to start in about 72 days – a historic event that would either bring prosperity for local Sindhis or as happened with other other resources in Sindh and Balochistan, persons from far away lands would become the primary beneficiaries of the income from the off-shore oil and gas.

Unlike other federations such as Canada, where the laws ensure that a bulk of income goes to the provinces where resources are located and for the welfare of local communities, Pakistan’s laws enable the central government to be the main beneficiary. Even under the present laws, oil and gas companies either do not spend their committed amounts on local communities or miss-spent them on other things whose beneficiaries are not local communities. The article says that even the current laws require an off-shore oil and gas company to make the following investments in the local communities:

1. Invest US$ 50,000 during the exploration phase until the resource is discovered.

2. Invest $ 100,000 from the discovery to actual production. In addition, $ 250,000 is to spent on the areas directly impacted by the exploration/ production activities.

3. After a field is in production, an investment of US $ 500,000 annually (Marine Research and Coastal Area Development Fee) is to be invested for the uplift of the local communities. In addition, these companies have the obligation to hire and train certain percentage of employees from local areas.

The article argues that both the Government of Sindh and Sindhi people are in dark of how much and where the civil society commitments are being spent. These stakeholders have no representation in the bodies who have the responsibility to keep accounting for such funds.

There is an urgent need to change existing laws to ensure that the royalties paid to provinces from such resources are at par with other countries (for example, in Canada, Alberta province receives between 29% to 33% in royalties).

The article points out that the current Minister for Petroleum is Mr. Naveed Qamar, a Sindhi. The article asks question who will be responsible for the injustice if Sindhis do not receive their due share from these resources?

Finally, the article concludes that the onus to ensure that justice is done lies with the people of Thatto and Badin districts and their elected representatives. The article warns that it would not be sufficient to only depend on one or two local NGOs to successfully protect the rights of local people.

February 11, 2010

4 thoughts on “Sindh’s rich Off-shore Oil and Gas Resources”

  1. Stop blamming other and look within for the problems. So called political leaders of Sindh once in power or sharing power in Federal and Provincial level have only looked after their personal bank accounts and not even their own village, town or cities. Dont you see the conditions of Larkana, Nawabshah, Khairpur, Jacobabad. Wake up and realize the bitter truth and learn to stand up yourself for YOURSELF.

  2. Sindh aik a seee zameen hai jahanan ALLAH Pak key her
    her nimaat hai, oil, gas,aggriculture,indus river mutlab kay KHUDA ke b nimaat hotay hoei bi hum sindhi gareeb ,yateem ku hoo gaiein hain.
    shayaad tumaray siyasee hakmaran he a see hain,
    jo sirf apni anaa main lagay howein hain.

  3. sindh is a only provenice in the pakista which is rech with all atural resourescs but people are very pooer , greeady peoples are they enjoy from aour resorses but we beeg from them

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