WASIM IQBAL

ISLAMABAD: Public Accounts Committee (PAC) was informed on Wednesday that the Ministry of Petroleum and Natural Resources has yet to initiate action against oil exploration and production companies which obtained licenses in 1999 but are yet to start their exploration activities.

Syed Khursheed Shah chaired the meeting of the PAC where the committee members reviewed audit report of the Ministry of Petroleum and Natural Resources for year 2013-14.

The audit officials pointed out that as many as 17 E & P companies obtained licenses for exploration in 40 blocks but did not act upon as per their commitments for exploration of oil and gas. Moreover, the monitoring authority i.e. Director General PC neither investigated the matter nor cancelled their licenses. This resulted in non-granting of licenses to some other willing E & P companies for overcoming energy crises.

Secretary Petroleum Ministry, Arshad Mirza revealed before the committee that in 14 blocks licenses were revoked, out of these four blocks revocations were challenged in the court of law. In 14 blocks, work commitments were not fulfilled because work was held due to security issues. The department informed that in four blocks the companies concerned completed work commitments and in eight blocks notices for revocation were served.

Chairman Committee asked about the court of law which has been sustaining stay to E&P companies for last 17 years. He said that the government was facing billions of financial losses due to flawed policies of the government and incompetent government lawyers.

He also directed the PAC Secretariat to arrange a consultative meeting to review the various cases against the government departments pending with the court of law. He directed the Minister for Law, Attorney General of Pakistan, Secretary Law, Auditor General of Pakistan and Finance Ministry officials to appear in the consultative meeting.

The committee also directed the Ministry of Petroleum and Natural Resources to submit inquiry report for supply of additional gas to Mari Petroleum Company Ltd Islamabad beyond entitlement and charged concessionary rates, ignoring the Prime Minister’s instructions for fixation of gas quota. This resulted in loss of revenue of Rs 29.28 million.

The audit officials further pointed out that the OGDCL sold 4 LPG 5 ton lots from Bobi Oil Complex, 26 lots from Kunnar and 10 lots from Adhi Oil Fields without signature bonus during August 2007 to December 2012. Resultantly, the OGDCL sustained a loss of Rs 1.2 billion on sale of these lots.

Responding to audit objections, Managing Director OGDCL Zahid Mir said that the company is abolishing the quota regime in phases, adding, the company was distributing 360 Metric Ton LPG through quota system but it started allocation of LPG through open bidding after the introduction of government Petroleum Policy 2007. He maintained that the quota system has almost been revoked as 330 Metric Ton LPG is now being sold out through open bidding, adding that since WAK Gas and Capgas obtained stay order in their favour therefore they are being provided LPG under the quota system.

A share of Adhi field was allocated to WAK Gas. The company owned by former senators Gulzar Ahmed Khan, Waqar Ahmed Khan and Ammar Ahmed Khan was given 50 per cent LPG quota in 1988. The remaining 50pc quota from the Adhi field was equally divided between Capgas and Sun Gas, according to the OGDCL record.