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IPS Seminar Brief

Development Initiatives in FATA (II)

Oil and Gas Sector – Prospects and Strategies

Institute of Policy Studies (IPS), Islamabad

has a robust schema of research-oriented

activities on the Tribal and Frontier Regions

of Pakistan under its larger program titled as

“Pakistan: Geo-Strategic and Geo-Political

Dynamics.” A number of events have been

organized on various dynamics of FATA

during last three years. Going beyond the

prevailing discourse dominated by militancy

and counter-militancy efforts, IPS has

recently initiated a series of events focusing

on various development related aspects of

discourse on tribal and frontier regions of the

country. The second program of the series

was organized on September 19, 2014 with

the title of “Development Initiatives in FATA

(II): Oil and Gas Sector – Prospects and

Strategies.” While the specific focus was on

Oil and Gas Sector, related developmental

and policy issues, as well as the overall

situation in FATA, as is natural, also came

under extensive discussion. The following is

a brief derived from the proceedings of the

event:

Khyber Pakhtunkhwa was not on the

country’s oil and gas map till late 1990s,

when the then government realized the

Dr. Fazli Rabbi, Associate Professor in the Center of

Excellence on Geology, University of Peshawar was

the main speaker while the event was chaired by Dr.

Gulfraz Ahmad, former Secretary Petroleum and

Natural Resources, Government of Pakistan. This

brief was prepared by Brig. (r) Said Nazir, senior

associate of IPS. 1The blocks include areas pertaining to Tirah (Orakzai

& Khyber), Karak and parts of North Waziristan, FR-

Peshawar, FR-Kohat, NASHPA (Karak, parts of North

Waziristan), Lathambar (Bannu and North

Waziristan), Wali (Bannu, FR-Tank and South

significance of hydrocarbon potential of this

vast swath of country’s land mass. The first

well was drilled in 2005 and now the

province produces 15% of country’s oil and

has overtaken Punjab in gas production.

Lying just next to KPK, FATA too can prove

to be a similar case. Technical data and

chemical analysis of the samples collected

from the field areas indicate that tribal areas

are blessed with sizeable reserves of oil and

gas which are yet to be explored and

developed.

There are a total of seventeen blocks

identified and demarcated with the status of

application and exploration. As to the

subsurface wealth of oil and gas, these blocks

may be taken as independent of

administrative and geographical boundaries.

These cover different areas from tribal

agencies to the frontier regions and adjoining

settled areas of KPK. There are nine oil and

gas exploration companies besides ODGCL

which have been granted the licenses for

exploration in the already surveyed blocks.1

However certain issues ought to be

settled and addressed by the government for

meeting the goal of oil and gas exploration

and tapping its potential optimally:

Waziristan), FR-Bannu West, Orakzai, Wali West

(North and South Waziristan), TAL (Kohat, Part of

Orakzai, Karak and North Waziristan), Manzalai

(Kohat Karak and parts of FR Bannu), Marwat (FR-

Tank and Bannu), Zhob and Parts of FR DI Khan,

BASKA (Balochistan and parts of FR DI Khan),

Loralai and Parts of FATA, Baska North (South-

Waziristan and parts of FR D. I. Khan.

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Provision of proper security for

project staff for mapping & collection of rock

samples, is necessary. It is unfortunate that

for the last one decade the Khyber

Pakhtunkhwa, in general, and tribal areas, in

particular, remain under turmoil and

insurgent situation. This disorder in law and

order badly hampers the developmental

activities in the area. Peace is a pre-requisite

for initiating mass scale developmental

activities. Oil exploration and development is

one such area where multinational companies

can contribute in expediting pace of the

development. In absence of desired security

arrangements, it becomes rather difficult to

involve multinational companies with full

fledge operational activities. So a

comprehensive, all-round strategy is

required.

FATA is in a state of flux. It is

difficult to launch development projects and

reforms in a conflict zone. However if there

is a will there is a way, as evident from the

painstaking survey carried out in the hostile

and poor security environments. The way

forward suggested was to make the local

populace stakeholders in the discovery and

exploration projects. The collective

responsibility clause contained in the FCR be

directed towards the provision of safe and

secure environments by the local tribes in the

respective surveyed blocks.

According to the Article 161(1) of the

Constitution of the Islamic Republic of

Pakistan, royalty and excise duty on natural

resources shall be paid to the provinces where

the resources are located. After the 18th

Amendment, resources of the oil and gas are

now shared by the federal and provincial

governments at the ratio of 50:50 and it

warranted the development of a full-fledged

regulatory mechanism to manage these

resources, more so, FATA being federally

administered areas does not figure out here in

the resource sharing formula. The people of

FATA are not on the list of divisible pool and

not included in the resource utilization

priority table, as in vogue for the federating

units (provinces) via 18th amendment in the

constitution, therefore special provisions are

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required to be incorporated through the

presidential regulation for FATA zone. The

regulation shall lead to the empowerment of

the people of FATA, mainstreaming of the

area, and making them part of the decision

making process. The royalty rights as

applicable to the provinces be also applied to

FATA, so that the dividends of their natural

wealth are also shared by them.

A dedicated institution for research

related to hydrocarbon development has to be

setup to conduct systematic research in

assessment of the potential and geological

mapping and research on modern and

updated lines. Availability of technical

professionals can better impact on attracting

multinational companies to launch and

expedite exploration activities through

indigenous skilled people.

Proper planning and timely

implementation of the developmental

activities will further add in promoting socio-

economic uplift of the area which will bring

social and economic revolution in short span

of time.

Coming to the broader issues – the

political and security transition which is

around the corner in Afghanistan – the effects

of the change are transited in one form or the

other into the tribal belt. There is, thus, a need

to focus on the smooth and well calibrated

transition from war to peace in FATA. The

urge and need for change must not be ignored

but geared in way to reinforce the people’s

confidence on the state institutions and make

them cognizant of the fact that they are equal

citizens of the state and have got the right for

development, health and education. The

damaged done be rectified, the lost

confidence should be restored and colonial

laws and status of the area be shaped

according to the wishes of the people.

The environment must be shaped to

facilitate peace through reconciliation as the

vertex of the violence is over. The scope and

scale of the survey and exploration be

extended and deep inroads be made through

the people cooperation. The political

dispensation must make a comprehensive

plan with non-lapsable funds for the

development. Employment opportunities to

the locals and exploitation of the surface and

sub- surface resources for the benefit of the

people of the area will lead to the

development of communication

infrastructure and people to people contact.

Government should provide modern

machinery and gadgets for the survey and

extraction of the oil, gas and mineral wealth.

There is also a need to initiate the

survey and prepare feasibility for the allied

and value added industry for the local

products and its utilization. Reconstruction

Opportunity Zones (ROZs), a long pending

project, need to be activated and foreign

donors be encouraged to invest and

rehabilitate the war zone.

A start may be taken by the president

to visit the area and allocate/ dedicate the

NATO transit charges to the education and

health sector of FATA. He may announce

and promulgate a potent Local Bodies

Government Act to ensure peoples

participation at gross root level. His visit will

pave the way for the political government and

civil services to be more assertive and visible

in restoring the good order and people’s

confidence in the system.

The return of IDPs should also be

time-lined and properly facilitated.

--

The event was coordinated by Ms.

Fehmeedah Khalid.