The Oil and Gas Development Company Limited (OGDCL) has agreed with the Balochistan government to settle a substantial royalty of Rs 12.6 billion for the Uch Gas Field.
Since September 2021, OGDCL has suspended royalty payments to the Balochistan government. It cited an unusual surge in the revolving credit of power-buying entities. The recently reached agreement outlines a comprehensive mechanism for the payment of royalties. It spans from August to January 2024, with disbursements scheduled monthly.
Mardan Brings Matter at National Level
This significant development follows concerted efforts by the Balochistan government to recover overdue royalties. These are owed by OGDCL for the Uch Gas Field. The matter gained prominence when Balochistan’s caretaker Chief Minister, Mir Ali Mardan Khan Domki, brought it to national forums. In response, OGDCL has committed to settling the outstanding royalty payments covering the past three years.
Days back, Mari Petroleum Company Limited (MPCL) announced a major gas discovery in Balochistan, at the Maiwand X-1 ST-1 well in Block 28 of the Kohlu District in Balochistan. June 12, 2023 marked the initiation of exploration, and reached a final depth of 2,516 meters by November 12, 2023.
Mir Ali Mardan Khan Domki underscored the importance of royalties as Balochistan’s entitlement. he was pledging to allocate these funds towards the welfare of the population. The caretaker administration’s success in securing the retrieval of pending royalty payments over the past three years reflects a commitment to upholding the rights of the province. Domki emphasized the obligation of companies operating in Balochistan to adhere to pertinent laws governing royalty payments.
Mir Aki Mrdan expressed satisfaction with the amicable resolution. He highlighted the mutual understanding between OGDCL and the provincial government regarding outstanding royalty issues spanning the last three years. The minister expressed gratitude for the successful advocacy of Balochistan’s position on the national stage. He emphasized the imperative for companies in the province to comply with royalty payment laws. The allocated funds are slated for deployment in social and economic welfare initiatives. This can contribute to an enhancement in the overall quality of life. Domki reiterated that royalty is the indisputable right of Balochistan, an uncompromised commitment.
The resolution of this royalty dispute marks a crucial milestone in the relationship between OGDCL and the Balochistan government. The agreement not only addresses financial concerns but also sets a precedent for the lawful conduct of corporations. The committed use of royalty funds for the betterment of Balochistan signifies a positive step towards socio-economic development. It also underscores the significance of adhering to legal frameworks in resource-sharing agreements.
