Page 231 - Pakistan Oilfields Limited - Annual Report 2020

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NOTES TO AND FORMING
PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2020
229
PAKISTAN OILFIELDS LIMITED
Under the said Notification, the Supplemental Agreements already executed for conversion from
Petroleum policies 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 Petroleum Concessions (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 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. The Company filed Constitutional Petition challenging the imposition
of WLO on February 19, 2018 against Federation of Pakistan through Ministry of Energy (Petroleum
Division), Islamabad. The Honorable Islamabad High Court after hearing the petitioner on February
20, 2018, directed the parties to maintain the status quo in this respect. The case came up for
hearing on June 12, 2019 but was adjourned on the request of legal counsel of the Government.
The Islamabad High Court had fixed March 19, 2020 as next date of hearing, but the hearing was
cancelled due to preventive measures taken in the courts amid Coronavirus.
On prudent basis additional revenue (net of sales tax) on account of enhanced gas price incentive
due to conversion from Petroleum Policy 1997 to Petroleum Policy 2012 since inception to June 30,
2020 amounting to Rs 13,949,495 thousand will be accounted for upon resolution of this matter
(including Rs 10,855,542 thousand related to period since inception to June 30, 2019). Additional
revenue on account of enhanced gas price incentive of Rs 15,389,552 thousand including sales tax
of Rs 2,236,089 thousand received from customer on the basis of notified prices has been shown as
"Other liabilities" under "trade and other payables".
2020
2019
Rupees ('000)
28.
OPERATING COSTS
Operating cost - Own fields
885,324
1,258,412
- Share in joint operations
3,227,029
2,798,262
Well work over
47,060
412,067
POLGAS/CAPGAS -Cost of gas/LPG, carriage etc.
4,575,689
4,888,872
Head office and insurance charges
59,173
174,718
Pumping and transportation cost
57,413
70,095
Depreciation and amortization
1,497,550
1,621,907
10,349,238
11,224,333
Opening stock of crude oil and other products
313,921
320,152
Closing stock of crude oil and other products
(404,494)
(313,921)
10,258,665
11,230,564