According to a research report of  AKD Research, Pakistan Petroleum Ltd (PPL) announced the successful grant of a Development and Production Lease (D&PL) for the Sui Gas Field, covering 455.80 sq. km for ten years from Jun’15. As per the notice, the company has outstanding current liabilities amounting to PkR52.5bn (PkR19.3/sh) as of Sep’24 under production bonus/social welfare obligations, which the company will now fulfil up till May’25 (as per payment schedule approved by the ECC). Further, the notice stated that the company plans to apply for further extension for the Sui D&PL lease post-May ’25.

The Sui D&PL lease was initially scheduled for implementation in June ’15; however, finalized terms between the Government of Balochistan (GoB) and the company were delayed due to unresolved royalty claims. As a result, the company continued to accrue an additional lease extension bonus of 10% on the field’s revenues while pricing the Sui field at an enhanced 55% of PP-12 under the agreements.

With the formal granting of the D&P lease, the company has confirmed the settlement of past-due obligations under the payment terms approved by the ECC. However, the obligation had already been recognized in the company’s P&L through lease extension bonuses in royalty charges. Hence, cash outflows of the stated amount should be expected until May’25.