Page 23 - Condensed Interim Financial Statements - 1st quarter ended September 30, 2019

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Under the said Notification, the Supplemental Agreements already executed for conversion
from Petroleum policies of 1994 & 1997 shall be amended within 90 days, failing which the
working interest owners will not remain eligible for gas price incentive. On January 03, 2018,
Directorate General Petroleum Concessions (DGPC) has required all exploration and
production companies to submit supplemental agreements to incorporate the
aforementioned amendments in Petroleum Concession Agreements (PCAs) signed under
1994 and 1997 policies, for execution within the stipulated time as specified above.
Based on legal advice, the Company is of the view that already executed Supplemental
Agreement cannot be changed unilaterally, the Supplemental Agreement was signed under
the Conversion Package where gas price was enhanced and Windfall Levy on
Oil/Condensate (WLO) was not applicable, the impugned SRO by giving retrospective effect
amounts to taking away the vested rights already accrued in favour of the Company. The
Government has no authority to give any law or policy a retrospective effect. The Company
filed Constitutional Petition challenging the imposition of WLO on February 19, 2018 against
Federation of Pakistan through Ministry of Energy (Petroleum Division), Islamabad. The
Honorable Islamabad High Court after hearing the petitioner on February 20, 2018, directed
the parties to maintain the status quo in this respect. The case came up for hearing on June
12, 2019 but was adjourned on the request of legal counsel of the Government. The
Islamabad High Court has fixed October 22, 2019 as next date of hearing.
On prudent basis additional revenue (net of sales tax) on account of enhanced gas price
incentive due to conversion from Petroleum Policy 1997 to Petroleum Policy 2012 since
inception to September 30, 2019 amounting to Rs 11,309,795 thousand will be accounted for
upon resolution of this matter. Additional revenue on account of enhanced gas price incentive
of Rs 12,509,806 thousand including sales tax of Rs 1,817,664 thousand received from
customer on the basis of notified prices has been shown under "trade and other payables".
Operating Cost - Own fields
- Share in joint ventures
Well workover
POLGAS-Cost of gas /LPG, Carriage etc.
Pumping and transportation cost
Opening stock of crude oil and other products
Closing stock of crude oil and other products
16. Operating costs
Three months period ended
Sep 30, 2019
Sep 30, 2018
Notes to and forming part of the Condensed Interim
Financial Statements (Unaudited)
For the three months period ended September 30, 2019