Daily Times

ISLAMABAD: The Public Accounts Committee (PAC) on Thursday directed the Oil and Gas Development Company Limited (OGDCL) and the Petroleum Division to conduct an inquiry in purchasing substandard chemical for drilling of wells causing a loss of Rs 7 billion to the national exchequer.

The PAC, which met under the chairmanship of opposition leader in National Assembly Syed Khurshid Shah, reviewed audit report of Petroleum Division for the year 2016-17. It directed the officials concerned to submit inquiry report within 15 days.

The audit report observed that a rate contract for hiring of mud engineering services from M/s SCOMI Oil Tools Ltd was awarded on June 26, 2013 for one year. The contractor provided services on different wells from June 2013 to February 2016 for Rs 7822.217 million. In 2016, the management got the sample of mud tested from different independent labs and found it substandard, according to the audit report.

The report maintained that the executive committee of the OGDCL decided to conduct an inquiry to ascertain the facts and fix the responsibility but the audit department was not informed about the outcome of the inquiry. “Since the management of the OGDCL did not ensure regular inspection through lab testing as per agreement therefore the quality of chemicals and services was not known to the management throughout the period of contract. This resulted in payment of Rs 7822.217 million for substandard chemicals,” the report stated.

The audit report believed that the supply of substandard chemical was made possible due to slackness on the part of OGDCL management and that the payment of over Rs 7 billion should be considered to be ‘irregular’.

During the meeting, members of the committee sought detailed report from the OGDCL regarding performance of gas and oil fields.

Audit officials said that 17 gas fields were running in loss from 2013 costing billions of rupees to the exchequer but the ministry didn’t close such fields.

OGDCL Managing Director Zahid Mir told the meeting that some fields were working since 1980 and generating 20 million cubic feet gas. He said the land was being reverted to owners after excavation of wells and extracting the oil.

He informed the committee that vehicles were rented out against a sum of Rs 268 million for Tando Allah Yar fields while this step was declared as illegal. Ashiq Gopang, member of the PAC, sought an inquiry into the matter.

The PAC also sought record of Rs 1.20 billion payments to employees on the accounts of salaries while the overall loss was about 200 percent from these fields.

It was revealed in the meeting that Rs 140 million were embezzled in procurements for development of Ouch gas field. To investigate the matter, a committee headed by Petroleum secretary has been constituted which would submit its report within one month.

Published in Daily Times, October 27^th 2017.