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Selected notes to and forming part of the Condensed Interim
Consolidated Financial Information (Unaudited)
For the six months period ended December 31, 2017
36
18. Net sales
4,106,680
7,358,610
140,402
2,749,936
1,939,408
3,457,952
43,885
77,589
6,230,375
13,644,087
18.1.
Crude oil
3,174,792
5,593,952
Gas
2,319,673
4,410,577
POLGAS/Cap Gas - Refill of cylinders
1,743,269
3,070,038
Solvent oil
31,669
64,236
7,269,403
13,138,803
On August 28, 2015, the Company signed the Supplemental Agreement with the
Government of Pakistan (the Government) for conversion of TAL Block Petroleum
ConcessionAgreement (PCA) signed under the 1997 Petroleum Policy to Petroleum
(Exploration & Production) Policy 2012. Price regimes prevailing in PetroleumPolicy 2007,
PetroleumPolicy 2009 and Petroleum Policy 2012 shall be applicable correlated with the
spud date of wells in the respective policies starting fromNovember 27, 2007 and for future
exploratory efforts under the above mentioned block. The conversion package included
Windfall levy on Natural gas only. Draft statements specifying sums aggregating US $ 34.2
million (Rs 3,390 million) till June 30, 2015 due to the Company in respect of Mamikhel,
Maramzi &Makori East discoveries in TALblock were submitted to the Government on
December 8, 2015. These statements are pending finalization by the parties to the
agreement. During the period, Oil and Gas RegulatoryAuthority (OGRA) issued gas price
notifications of the subject arears.
On December 27, 2017, the Ministry of Energy (Petroleum Division) notified amendments
in Pakistan Petroleum (Exploration and Production) Policy 2012 and has imposed windfall
levy on Oil/Condensate. Under the said Notification, the Supplemental Agreements
already executed for conversion fromPetroleumpolicies of 1994 & 1997 shall be amended
within 90 days, failing which the working interest owners will not remain eligible for gas
price incentive. On January 3, 2018, Directorate General PetroleumConcessions (DGPC)
has required all exploration and production companies to submit supplemental
agreements to incorporate the aforementioned amendments in Petroleum Concession
Agreements (PCAs) signed under 1994 and 1997 policies, for execution within the
stipulated time as specified above.
Based on legal advice, the Company's is of the view that already executed Supplemental
Agreement cannot be changed unilaterally, the Supplemental Agreement was signed
under the Conversion Package where gas price was enhanced and Windfall Levy on
Oil/Condensate (WLO) was not applicable, the impugned SRO by giving retrospective
effect amounts to taking away the vested rights already accrued in favour of the Company.
The Government has no authority to give any law or policy a retrospective effect and the
Company will challenge the imposition of WLO in the court of law. The impact of WLO on
conversion of TAL block till to date is approximately US $ 134 million (Rs13,687 million)
and value of enhance gas price revenue is US $ 63 million (Rs 6,404 million). On prudent
basis effect of adjustment on account of enhanced gas price incentive due to conversion
Six months period ended
Three months period ended
Rupees ('000)
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2016
Dec. 31, 2017