Industry sources said the new policy, approved last week by military ruler General Pervez Musharraf, is set to provide a four-year holiday on royalty payments for producers who find oil offshore. Royalty would rise to five percent in the fifth year, 10 percent in the sixth year and 12.5 percent in the seventh and successive years, industry sources said. Corporate tax would be 40 percent when offshore discoveries turn profitable, compared with a 50-percent corporate tax for other discoveries, the sources said. Incentives are greater for ultra-deep water exploration. No details about the new policy have been published. "The entire effort is to bring major oil companies such as BP Amoco, Exxon Mobil, who are not active in Pakistan ... but they would only stand in the queue if there is one elephant discovery," said an executive at a foreign oil producer. He said a large discovery would minimise the country risk attached to Pakistan, since producers would have an option to export oil produced in deep water.