Page 238 - Pakistan Oilfield Limited - Annual Report 2022

236
PAKISTAN OILFIELDS LIMITED

Notes to and Forming Part of the -
Consolidated Financial Statements

For the year ended June 30, 2022

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 3, 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 Honourable Islamabad High Court after hearing the petitioner
on February 20, 2018, directed the parties to maintain the status quo in this respect. After multiple
hearings, the case came up for hearing on May 24, 2022 before the Honourable Chief Justice of
Islamabad High Court, wherein matter was adjourned till June 30, 2022, however the same could
not be heard and next date of hearing is yet to be announced.

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 June 30,
2022 amounting to Rs 19,658,634 thousand will be accounted for upon resolution of this matter
(including Rs 16,523,036 thousand related to period since inception to June 30, 2021). Additional
revenue on account of enhanced gas price incentive of Rs 19,041,773 thousand and sales tax of
Rs 3,237,101 thousand received from customer on the basis of notified prices has been shown as
"Other liabilities" under "trade and other payables". Sales tax of Rs 3,237,101 thousand (June 30,
2021: Rs 2,753,339 thousand) received from customer on the basis of notified prices is declared
in the monthly sales tax return as well as duly deposited with Federal Board of Revenue by the
Company. The amount so deposited is shown within "sales tax refundable" in "advances, deposits,
prepayments and other receivables".

2022 2021
Rupees ('000)

26. OPERATING COSTS
Operating cost - Own fields 1,043,106 909,268
- Share in joint operations 3,308,818 3,311,509
Well work over 568,151 79,441
POLGAS/CAPGAS - LPG, carriage etc. 3,764,470 2,866,201
Head office and insurance charges 171,751 196,127
Pumping and transportation cost 77,060 72,171
Depreciation and amortization 1,550,090 1,540,943
10,483,446 8,975,660

Opening stock of crude oil and other products 298,357 404,494
Closing stock of crude oil and other products (423,253) (298,357)
10,358,550 9,081,797