PEL Prevails in International Court Over Oil Dispute with Canadian Firm


Islamabad, Pakistan – In a significant legal victory, Pakistani oil firm Petroleum Exploration (Pvt) Ltd (PEL) has emerged triumphant in a protracted legal battle against Bermuda-based Frontier Holdings Ltd (FHL) at the International Court of Arbitration. The ruling, spanning over 80 pages, solidifies Pakistan’s legal authority over Petroleum Concession Agreements (PCAs) and Joint Operating Agreements (JOAs) within its borders.

FHL, a subsidiary of Canadian company Jura Energy Corporation, initiated the dispute regarding their involvement in the Badin North and Badin South blocks, where FHL holds a 27.5% share. The blocks were initially awarded by the Ministry of Petroleum in 2006.

The tribunal, by a majority decision, asserted that it lacks jurisdiction in this matter, underscoring Pakistan’s legal sovereignty in arbitrating agreements related to oil exploration and production. Moreover, FHL has been directed to bear the arbitration costs amounting to $250,000.

A senior official from PEL expressed that the international arbitration was a ploy to impede oil and gas exploration activities in Pakistan. The official further noted that non-operating entities in the sector, including FHL, have defaulted on financial commitments to the Pakistani government and major industry stakeholders like OGDCL and Mari Petroleum.

This ruling marks a significant precedent affirming Pakistan’s legal standing in regulating its oil and gas sector, safeguarding national interests and industry operations.

Story by Kalbe Ali

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