Sr.

No
.
1.

2.

3.
4.

Onshore Petroleum Concession Agreement (PCA)

Onshore Petroleum Concession Agreement
(PCA)
Division: Zone I, Zone II, Zone III
o Zone I West Balochistan, Pashin and
Potowar Basins
o Zone II Kirthar, East Balochistan,
Punjab Platform and Suleman Basins
o Zone III Lower Indus Basins
Royalty:
Payable @ 12.5% of value of Petroleum at the
field gate
Income Tax:
Payable @40% of profits or gains
WLO(Windfall Levy) for GoP:
WLO=0.4 x (M-R) x (P-B)

5.

WLG(Windfall Levy) for other than GoP:

WLG=0.4 x (PG-BR) x V

6.

Incentives:
on Import Duties/Taxes and Fees will be effective
on the date of execution of the Exploration
Licenses/PCAs
Production Bonuses:

7.

8.

Cumulative
Production
(MMBOE)
At start of commercial
production

Amount
(USD)

30

1,200,000

60

2,000,000

80
100

5,000,000
7,000,000

600,000

Incentives for EP Companies Incorporated in

Pakistan:

Exploration blocks with 100% ownership

JV with foreign E&P companies, local E&P

companies working interest will be :
o 15% in Zone-I
o 20% in Zone-II
o 25% in Zone-III

5% working interest of GHPL

9.

Exploration Period: extension period can be

awarded on the following terms:

If seismic & drilling services are not readily

available in the country

Operator commits to undertake additional

work equivalent to at least 10% more than
minimum work obligation

Additional accelerated area equivalent to

10% of original license area

Force Majeure

10.

Extended Well Testing:

A request for approval of EWT (including

temporary production facilities) will be made
to DGPC providing information with regard to
a. technical justification for EWT
b. proposed duration for EWT
c. a plan with regard to disposal of gas
during the proposed EWT period

Flaring for EWT should not exceed 30 days

unless exceptional circumstances
In case of approved EWT, the gas price shall
entail a 5% discount for on spec gas and 10% for
off spec gas for that Zone.
Retention Period (for Exploration activities): 5
Years in Zone I or Zone II for significant gas
discovery
Total Lease Term: Up to 25 years plus 5 renewal

11.

12.
13.

14.

Grant of Lease after Expiry of Lease Term:

Renew the lease term for another 5 years on
behalf of amount equivalent to 15% of the
wellhead value
Rentals:

Advance rental charges for exploration

license on following rates:
o 5 years initial term of license=Rs.3500
per square kilometer OR Rs.800 per
square kilometer each year
o On each renewal of license Rs.5000 per
square kilometer OR Rs.2750 per square
kilometer each year

Advanced rental charges during lease

period
o Rs.7500 per square kilometer during
initial lease period
o Rs.10,000 per square kilometer during
renewal period.

15.

Non fulfilment of work obligations :

Exploration Licensee will pay compensation which
will be calculated based upon number of work
units unfulfilled x USD amount for work units.
Reconnaissance permit: minimum expenditure
obligation specified in permit deeds

16.

Spending on Training (Onshore)

$25,000 per year during exploration
$50,000 per year during development and
production
Social Welfare Spending
$30,000 per license year during exploration
During Production:
BOE/d
Amount per year
<2000
$50,000(Zone I);
$37,500(Zone II & III)
2,000 5,000
$100,000(Zone I);
$75,000(Zone II & III)
5,000 10,000
$200,000(Zone I);
$150,000(Zone II & III)
10,000 50,000
$400,000(Zone I);
$300,000(Zone II & III)
>50,000
$700,000(Zone I);
$525,000(Zone II & III)
Work Units in Zone I & II
Type of work
Equivalent work unit
1 Line km of 2D seismic
0.3
1 Line km of 3D seismic
1.0
1
1000 meter
100
2000 meter
200
Exploration
3000 meter
400
well in
4000 meter
600
onshore
5000 meter
1000
location
6000 meter
2000
7000 meter
3000
Work Units in Zone III
Type of work
Equivalent work unit
1 Line km of 2D seismic
0.3
1 Line km of 3D seismic
1.0
1
1000 meter
50
2000 meter
80
Exploration
3000 meter
100
well in
4000 meter
200
onshore
5000 meter
330
location
6000 meter
600
7000 meter
900
Pricing Provision for Zone III
US$/BBL
Applicable%
US$/BBL
of C&F Price
0 to 30
100%
30
30 to 50
Plus 50%
10
incremental
increase
50 to 70
Plus 30%
6
incremental
increase

17.

18.

19.

70 to 110

19.

20.

Plus 20%
incremental
increase
(A+B+C+D)

Applicable c&f
54
price
Marker Price
63.33% of
$34.2
Onshore Zone applicable c&f
III
price
Conversion factor assumed (MMBtu/bbl) 5.7
Zone III producer price in US$/MMBTU
6
Pricing Provision for Zone II
US$/BBL
Applicable%
US$/BBL
of C&F Price
0 to 30
100%
30
30 to 50
Plus 50%
10
incremental
increase
50 to 70
Plus 30%
6
incremental
increase
70 to 110
Plus 20%
8
incremental
increase
Applicable c&f (A+B+C+D)
54
price
Marker Price
66.5% of
$35.91
Onshore Zone applicable c&f
II
price
Conversion factor assumed (MMBtu/bbl) 5.7
Zone II producer price in US$/MMBTU
6.3
Pricing Provision for Zone I
US$/BBL
Applicable%
US$/BBL
of C&F Price
0 to 30
100%
30
30 to 50
Plus 50%
10
incremental
increase
50 to 70
Plus 30%
6
incremental
increase
70 to 110
Plus 20%
8
incremental
increase
Applicable c&f (A+B+C+D)
54
price
Marker Price
69.66% of
$37.616
Onshore Zone applicable c&f
I
price
Conversion factor assumed (MMBtu/bbl) 5.7
Zone I producer price in US$/MMBTU
6.6