OGDCL To Clear Uch Gas Field's Arrears As Per 2018-land Lease Extension

The Oil and Gas Development Company Limited (OGDCL) has said that it would pay arrears of Uch Gas Field, located in Dera Bugti of Balochistan province, to landowners as per the lease extension from January 1, 2018 on usual terms, rejecting some media reports which were based on 'incomplete information

ISLAMABAD, (UrduPoint / Pakistan Point News - 7th Jul, 2020 ) :The Oil and Gas Development Company Limited (OGDCL) has said that it would pay arrears of Uch Gas Field, located in Dera Bugti of Balochistan province, to landowners as per the lease extension from January 1, 2018 on usual terms, rejecting some media reports which were based on 'incomplete information.' Sharing the factual position, the company said Uch Gas Field in Dera Bugti was one of its major fields with average daily production of 330 Million Cubic Feet (MMCF) generating annual revenue of Rs 28 billion through sale of gas.

"The field contributes 1/3rd of the total gas production of the company. Uch Gas Field is a strategic asset and plays significant role in mitigating country's energy demand," OGDCL said in a news release.

The company installations at the field include thirty one wells, plant & allied facilities, offices and residential enclave. "The field is situated in a security sensitive area. In order to ensure uninterrupted and optimum operations, OGDCL has deployed elaborate security setup there." Under an arrangement agreed with late Nawab Akbar Khan Bugti, OGDCL initially in the year 1995 had obtained 730 acres which was subsequently enhanced to 1325 acres land.

"In view of security situation the land finally increased to 4300 acres in the year 2001. Out of the said 4300 acres, family of late Nawab Akbar Khan Bugti owns 3204 acres. OGDCL is required to pay rent on leased land with yearly escalation @ 12%. Ever since the company is making payment to the land owners as per the aforesaid arrangement," the news release said.

In 2016, the OGDCL initiated an internal exercise to review land requirement for its facilities and security cordon, and issued notices for de-hiring a portion of land.

The de-hiring, however, could not be implemented as OGDCL's security contractor (FC Balochistan) on account of law and order situation expressed reservations on relocation of security posts and also expressed inability to grant access to land owners for cultivation.

"OGDCL was advised not to de-hire under the prevailing circumstances. The aforesaid position was reiterated by the security contractor (FC Baluchistan) in January, 2020." The previous agreement between the parties expired in December 2017 and a renewal on usual terms was due in January, 2018 which could not be finalized.

Meanwhile, the company said, landowners approached the Federal Government for redressal of their grievances, contending that the OGDCL was not paying rent for the land under its use and the actual numbers were significantly higher. Consequently, the land was measured on three occasions during the period 2019-2020.

During the last measurement exercise conducted with the assistance of Geological Survey of Pakistan the area under the use of OGDCL and its security apparatus was indicated in excess of 27,000 acres.

The OGDCL did not agree with the process and communicated its reservations on these numbers. Parties have nevertheless agreed that a new measurement exercise under the supervision of Federal Government in coordination with the concerned law enforcement agencies and district government will be undertaken to finalize future requirement and lease agreements.

"Since de-hiring initiated in 2016 was not implemented therefore it was decided that extension of lease from January 1, 2018 on usual terms would be made for 4300 acres and arrears would be cleared to avoid further controversy and escalation of dispute with the landowners."The company said it believed in peaceful coexistence with the local communities. "Landowners and local tribesmen are OGDCL's stakeholders. All disputes and points of disagreement will be resolved in a just and fair manner on the basis of mutual trust and respect."