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ANP Bidding Round 2013

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ANP Bidding Round 2013
NameANP Bidding Round 2013
TypeLicensing round
CountryPakistan
RegionSindh; Balochistan; Offshore Arabian Sea
AuthorityDirectorate General of Petroleum Concessions; Ministry of Petroleum and Natural Resources; Oil and Gas Development Company Limited
Year2013
OutcomeMultiple exploration licenses awarded; legal disputes

ANP Bidding Round 2013

The ANP Bidding Round 2013 was a licensing round administered by the Directorate General of Petroleum Concessions under the Ministry of Petroleum and Natural Resources in Pakistan, designed to attract international investment from companies such as Shell, ExxonMobil, BP, Total, ENI and China National Offshore Oil Corporation, and to allocate hydrocarbon exploration rights across onshore and offshore blocks in Sindh, Balochistan and the Arabian Sea. The round aimed to coordinate Pakistan State Oil, Oil and Gas Development Company Limited, Pakistan Petroleum Limited, Mari Petroleum Company Limited, and foreign partners including Petronas, Rosneft, and Kazakhstan's KazMunayGas to expand reserves, production sharing, and seismic programs through competitive bidding, fiscal terms, and environmental compliance.

Background and Objectives

The ANP Bidding Round 2013 emerged amid policy discussions involving the Ministry of Petroleum and Natural Resources, the Directorate General of Petroleum Concessions, and international stakeholders such as the Asian Development Bank, the World Bank, and the International Monetary Fund, seeking to respond to declining output from legacy fields like Sui, Kandhkot, and Mari. Objectives included attracting investment from national oil companies like China National Petroleum Corporation, QatarEnergy, and Petrobras, encouraging technology transfer from majors such as Chevron, ConocoPhillips, and Total, and aligning reserves growth with projects led by Pakistan Petroleum Limited, Oil and Gas Development Company Limited, and private players like OMV and Tullow Oil.

Bidding Process and Timeline

The process followed a structured timetable set by the Directorate General of Petroleum Concessions and announced through the Ministry of Petroleum and Natural Resources, with milestones comparable to licensing rounds in countries represented by Shell, BP, and ENI. The timeline included a prequalification phase for companies like PetroChina, Statoil (now Equinor), and Eni, a data-room period where geological data from the Geological Survey of Pakistan and seismic contractors such as CGG and Schlumberger were made available, an onshore and offshore bid submission deadline, and an award phase influenced by contractual models used by Iran, Norway, and the United Kingdom. Key dates mirrored practices seen in rounds run by the National Iranian Oil Company, the Norwegian Petroleum Directorate, and the UK Oil and Gas Authority.

Participating Companies and Consortiums

Bidders included a mix of international majors, national oil companies, and independents, among them Shell, ExxonMobil, BP, Total, ENI, Chevron, ConocoPhillips, Petronas, CNPC, CNOOC, Rosneft, KazMunayGas, Petrobras, QatarEnergy, and regional operators such as Pakistan Petroleum Limited, Oil and Gas Development Company Limited, Mari Petroleum Company Limited, and Attock Oil. Consortium formations resembled joint ventures seen between BP and Reliance, Eni and Rosneft, or Shell and PetroChina, with technical partners like Schlumberger, Halliburton, and Baker Hughes contracted for exploration drilling, and financing arrangements involving institutions like the Asian Development Bank, the Islamic Development Bank, and commercial banks.

License Blocks and Terms

The round offered offshore and onshore license blocks in Sindh, Balochistan, and the Arabian Sea, with contractual structures drawing from Production Sharing Contracts used by ExxonMobil in Guyana, BP in Azerbaijan, and Total in Angola, and fiscal elements informed by royalty and tax regimes similar to those in Norway, the United Kingdom, and Malaysia. Terms specified work commitments for 2D and 3D seismic acquisition, exploratory wells, environmental impact assessments in line with United Nations Environment Programme guidance, and state participation through Oil and Gas Development Company Limited or Pakistan Petroleum Limited. Model clauses addressed relinquishment, unitization, and arbitration under institutions like the International Chamber of Commerce, the International Centre for Settlement of Investment Disputes, and the London Court of International Arbitration.

Evaluation Criteria and Award Decisions

Evaluation applied technical, financial, and social criteria comparable to those used by the national oil companies of Brazil, India, and China, including bidders' exploration plans, financial capacity, past performance in fields such as Cantarell and Kashagan, and commitments to local content, employment, and infrastructure development relevant to Gwadar, Karachi, and Pasni. The awarding authority weighed work programs, signing bonuses, and production-sharing splits, with successful bids announced following multilateral consultations involving the Ministry of Petroleum and Natural Resources, provincial authorities in Sindh and Balochistan, and representatives from the World Bank and Asian Development Bank who had observed transparency measures.

The round generated disputes invoking judicial review in Pakistan's High Courts and appeals referencing arbitration mechanisms used in international disputes like those involving Chevron and Ecuador, Total and Iran, or Shell and Nigeria. Issues included allegations of procedural irregularities, provincial consent controversies tied to Sindh and Balochistan administrations, environmental concerns raised by civil society groups and NGOs, and competing claims among incumbents such as Pakistan Petroleum Limited and Oil and Gas Development Company Limited. Legal challenges referenced doctrines and precedents seen in cases before the Supreme Court of Pakistan, and prompted intervention proposals modeled on reforms in Indonesia, Mexico, and Nigeria.

Outcomes and Impact on Pakistani Petroleum Sector

Awards resulted in a series of exploration licenses granted to consortiums including international and Pakistani firms, stimulating commitments to seismic programs, appraisal drilling, and potential development that paralleled growth strategies in Ghana, Guyana, and Mozambique. The round influenced activity at ports like Gwadar and Karachi, affected gas supply dynamics involving Sui and Mari fields, and shaped interactions with energy projects tied to the China–Pakistan Economic Corridor, regional pipelines similar to the TAPI and Central Asia–China pipelines, and investments by firms such as China National Petroleum Corporation and Petronas. While some blocks led to new discoveries and investment pledges, others remained subject to litigation and renegotiation, mirroring outcomes seen in global licensing rounds administered by the national authorities of Brazil, Norway, and the United Kingdom.

Category:Energy in Pakistan