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Petroleum firms set to outsource 70 per cent of technical services

ISLAMABAD — The Economic Coordination Committee (ECC) of the Cabinet has allowed local petroleum companies to outsource up to 70 per cent of technical services to foreign firms for becoming operators of oil and gas fields for exploration and development.

According to a senior government official, this is one of the many relaxations allowed to the domestic companies on the instructions of President General Pervez Musharraf a few days.

He said the stringent pre-qualification criteria to become eligible to bid for concession agreements in the original policy cleared by the ECC a few months back had been contested by a number of local companies and had been made quite flexible on the intervention of the President.

The domestic companies would now be allowed to form joint ventures among themselves by putting together resources of two or more companies and show contract with foreign services companies for drilling, surveys and seismic activities.

Likewise, the domestic companies would also be allowed to provide upfront bank guarantees up to 50 per cent of their work plan for the exploration and development of natural resources.

However, the companies would be tied under the concession agreements to a strict time-line for the implementation work programme and the eligibility criteria would be defined under Management Information System (MIS) programmes for ranking instead of being at the discretion of government functionaries.

The official said standard operating procedures (SOPs) would be developed over the next few weeks in consultation with companies for security of exploration and development fields.