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
countrys oil and gas map till late 1990s,
when the then government realized the

significance of hydrocarbon potential of this

vast swath of countrys land mass. The first
well was drilled in 2005 and now the
province produces 15% of countrys 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 (FRTank and Bannu), Zhob and Parts of FR DI Khan,
BASKA (Balochistan and parts of FR DI Khan),
Loralai and Parts of FATA, Baska North (SouthWaziristan and parts of FR D. I. Khan.

No: 2014-15/01

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.
1
The blocks include areas pertaining to Tirah (Orakzai
& Khyber), Karak and parts of North Waziristan, FRPeshawar, FR-Kohat, NASHPA (Karak, parts of North
Waziristan), Lathambar (Bannu and North
Waziristan), Wali (Bannu, FR-Tank and South

Provision of proper security for

project staff for mapping & collection of rock

forward suggested was to make the local

populace stakeholders in the discovery and

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

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

No: 2014-15/01

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 socioeconomic 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 peoples
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
3

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 peoples
confidence in the system.
The return of IDPs should also be
time-lined and properly facilitated.
-The event was coordinated by Ms.
Fehmeedah Khalid.

No: 2014-15/01