Special Report
ISLAMABAD: The National Accountability Bureau (NAB) has sought comprehensive report from the Energy Ministry’s Petroleum Division about FHL-SPUD’ malpractices.
According to sources, NAB, in a letter to Secretary Petroleum Division dated 9th June, 2023, has required submission of a comprehensive report regarding FHL-SPUD’s malpractices latest by 21st June 2023.
The following irregularities have recently come under fire and investigation which require a realistic and immediate action by the concerned authorities into the corrupt malpractices by FHL-SPUD. There are currently separate investigations/interventions being carried out by Government institutions against the ill doings of FHL-SPUD including NAB, Transparency International, Ministry of Energy, Prime Minister Office which are produced as under:
INVESTIGATION BY NATIONAL ACCOUNTABILITY BUREAU:
On 9th June 2023, the National Accountability Bureau (NAB) has written a letter to Ministry of Energy in connection with the complaint under process in NAB. NAB has entailed:
- Willful Default on outstanding obligations on part of Defaulters FHL-SPUD owing a loss of 1.13 Billion PKR to the National Exchequer
- FHL-SPUD deceiving the Ministry of Energy into allowing of Assignments pending in various E&P Blocks
- Prime Minister office taking serious notice of this deceit by Defaulter FHL-SPUD
- Issuance of various Show Cause Notices and Default Notices to FHL-SPUD
- Instead of paying government Obligations FHL-SPUD have paid shareholders loan worth millions of dollars. In addition, FHL-SPUD are charging consultancy services to their subsidiaries (syphoning money out of the country.
There is currently an investigation being carried out by NAB into the ill doing of Defaulters FHL-SPUD and they have requested the above information from Ministry of Energy (Petroleum Division) under Section 27 of the NAB Ordinance, 1999.
INTERVENTION BY MINISTRY OF ENERGY (PETROLEUM DIVISION)
On 17th February 2022, the Ministry of Energy Petroleum Division declared FHL-SPUD as Royalty Defaulters and issued three Notices to Oil and Gas Buyers:
- Sui Southern gas Company Limited “SSGCL”
- Pakistan Refinery Limited “PRL”
- Engro Fertilizer Limited “EFL”
In all of these notices, it was stated that:
“The Competent Authority has decided to recover the outstanding royalty amount by directing the nominated Buyers to withhold the entire payment to the defaulter i.e. FHL-SPUD of its share in the oil and gas produced from the lease and also deduct at source the royalty amount in future invoices”
The notices were followed up by numerous reminders declaring FHL SPUD as Defaulters and in breach of the Constitution of Pakistan.
INVESTIGATION BY TRANSPARENCY INTERNATIONAL
On 16th December 2022, Transparency International Pakistan filed a complaint of official collusion with the private companies causing loss of PKR 1.13 Billion to the national exchequer.
TI Pakistan took up the complaint and wrote to the Prime Minister of Pakistan on 16th December 2022, to look into the matter and direct the regulators to recover the outstanding amount along with the interest prior to proceeding further on the contracts with the two companies.
On 16th January 2023, TI Pakistan wrote another letter to the Prime Minister of Pakistan that the Ministry of Energy (Petroleum Division), Directorate General of Petroleum Concessions directives issued on 17th February 2022 had found M/s SPUD Energy to be in continuing willful default of its obligations to pay the outstanding royalty and that no concrete progress has been made or initiated by the DG (PC) to recover the outstanding amount.
INTERVENTION OF PRIME MINISTER OFFICE:
On 12th January 2023, the Prime Minister of Pakistan directly intervened in the matter vide its Office letter No.4(5)/Mis/DS/(EA-I)/2022/83 instructed the Secretary Petroleum Division to ensure recovery of the outstanding amount from Defaulter FHL-SPUD within two weeks and submit compliance report.
Subsequently, the Prime Minister office declared FHL-SPUD as defaulters accordingly halted all pending applications/ approvals of Defaulters FHL-SPUD by instructing the same to Ministry of Energy.
Subsequent reminders were issued from the PM Office to Ministry of Energy dated 17th January 2023, 20th January 2023 and 3rd February 2023.
