‘Key OGDCL contracts must be awarded to national firms’

ISLAMABAD – Perturbed by the delay in commissioning of new gas discoveries because of litigation and chronic law and order issues, the National Assembly Standing Committee on Petroleum recommended the Oil and Gas Development Company Limited (OGDCL) to award its exploration and production contracts to key national strategic organisations to counter the delay tactics of multinational companies.
Committee Chairman Sheikh Waqqas Akram had given the direction to the OGDCL when its Managing Director Naeem Malik told the committee that because of litigation and law and order issues, the OGDCL had not been able to transmit 500mmcfd of gas to the transmission network for the last two years.
The chairman stated that some of the companies were holding the oil and gas sector hostage in connivance with officials and their power could be broken only by awarding the task to the National Engineering and Scientific Commission (NESCOM), Dr AQ Khan Research Laboratories (KRL) and Frontier Works Organisation (FWO).
“Establish strategic partnership with strategic organisations to expedite oil and gas exploration as they would themselves take care of litigation and law and order issues,” Akram said. The OGDCL managing director assured the committee that he would look into the recommendation. The committee was told that the OGDCL had five projects of 500mmcfd in hand which, if completed in time, would help address the energy shortage in the country.
Malik said that the 160mmcfd Uch II project could be completed sooner than the expected date of September 2013 to produce 450MW of electricity, provided that foolproof security was provided. He said that in the last three months, 70 blasts had occurred in Uch, Lottie and Pirkoh, bringing the operations of the company to a complete halt.
When questioned by Mir Ahmadan Bugti as to what benefits the company was giving to the local population to avoid unrest, Malik said that during exploration the OGDCL hired local people as guards and when production began, they would be offered jobs as well. However when pressed by the committee, he disclosed that the company paid the Frontier Constabulary (FC) to hire locals and no direct payment was made to any tribal chieftains.
Asked if there was a system in place to ascertain that the funds given to the FC were shared with the people who were creating trouble, Malik replied in the negative. He said the OGDCL had decided that in future it would extract liquefied petroleum gas (LPG) itself. The Dakhni plant would be shifted to Sinjhoro to extract 120 to 140 metric tons of LPG per day, he said, and that the decision was made to avoid litigation.
The committee said that the complete details of profit earned by LPG companies should be provided along with details of what the government and private sector earned from the sale of natural gas liquids. Briefing the committee on the Reko Diq Copper Gold project, representatives of the Balochistan government said that the provincial government intended to undertake the project itself.
They also demanded that the federal government waive a loan of Rs 29 billion given for the revival of the Saindak Copper Gold project, as Rs 6 billion had been returned already.