Page 40 - POL TITLE new

Notes to and forming part of the Condensed Interim
Consolidated Financial Statements (Unaudited)
For the six months period ended December 31, 2021

Balances with banks include foreign currency balances of US $ 153,794 thousand (June 30,
2021: US $ 142,461 thousand).The balances in saving accounts and short term deposits
earned interest/mark-up ranging from 1% to 11.5% (June 30, 2021: 0.3% to 8.21%).
(Unaudited) (Unaudited)
Three months period ended Six months period ended
Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2021 Dec. 31, 2020
Rupees ('000)
18. NET SALES
Crude oil/Condensate 6,812,414 3,883,387 12,799,794 7,948,449
Gas - note 18.1 3,614,555 3,559,235 7,117,156 7,295,838
Less: Shrinkages/own use 519,838 467,812 974,896 927,090
3,094,717 3,091,423 6,142,260 6,368,748
POLGAS/Cap Gas - Refill of cylinders 2,982,532 1,988,137 5,243,438 3,548,094
Solvent oil 66,823 49,975 134,357 98,321
12,956,486 9,012,922 24,319,849 17,963,612

18.1. On August 28, 2015, the Company signed the Supplemental Agreement with the
Government of Pakistan (the Government) for conversion of TAL Block Petroleum
Concession Agreement (PCA) signed under the 1997 Petroleum Policy to Petroleum
(Exploration & Production) Policy 2012 (Petroleum Policy 2012). Price regimes
prevailing in Petroleum Policy 2007, Petroleum Policy 2009 and Petroleum Policy 2012
shall be applicable correlated with the spud date of wells in the respective policies
starting from November 27, 2007 and for future exploratory efforts under the above
mentioned block. The conversion package included Windfall levy on Natural gas only.
Draft statements specifying sums aggregating US $ 34,213 thousand (Rs 3,393,389
thousand) till June 30, 2015 due to the Company in respect of Mamikhel, Maramzai &
Makori East discoveries in TAL block were submitted to the Government on December
8, 2015. On October 9, 2017 Oil and Gas Regulatory Authority (OGRA) issued gas price
notifications of the subject arrears.
On December 27, 2017, the Ministry of Energy (Petroleum Division) notified certain
amendments in Petroleum Policy 2012 which also included addition of following
explanation of conversion package:
“the conversion package shall include (i) price of Natural Gas for New Exploration
Efforts (ii) windfall levy on Natural Gas (iii) EWT gas production, pricing and obligations
(iv) Windfall levy on Oil & Condensate, only for PCAs converting from 1994 and 1997
Petroleum Policies and (v) Financial obligations relating to production bonus, social
welfare and training”.
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) had 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.
38