Crude oil theft inflicts massive loss to exchequer

NAVEED BUTT

ISLAMABAD: The national exchequer is facing billions of rupee loss due to theft of crude oil through illegal extraction from the main oil transmission line, use of water bowzers and through connivance with public officials.

According to an inquiry report prepared by Federal Investigation Agency (FIA), "the subject enquiry has been registered under the directions of the competent authority. The matter had previously been probed by National Crises Management Cell, Ministry of Interior, Islamabad as well as the energy department of the Khyber Pakhtunkhwa (KP) government. In both the previous enquiries, it has been concluded that oil worth billions of rupees had been stolen by the culprits and the national exchequer has been caused huge losses whereas the provincial government has been deprived of millions of rupees under the head of royalty."

The report further said that "the allegations under probe are mainly related to the mega theft of crude oil through different modes (1) by puncturing the main oil transmission line at different places, (2) use of water bowzers for the transportation of stolen oil, and (3) illegal enhancement of the storage capacity of the oil tankers to transport the stolen oil from the field with the connivance of public servants and others.

However, some of the other allegations leveled in the report of National Crises Management Cell are as:-

(1) Some officials of MOL Pakistan particularly Security Incharge Col Zubair is involved in the crude oil theft from MOL installation. They use to stop the meters and fill the oil tankers which are subsequently decanted on the way to the refineries.

(2) Oil tankers being filled from OGDCL field, take extra load of 300/400 liters of crude oil in each tankers with the connivance of OGDCL staff. Thereafter, the stolen crude oil is transported in tankers and later sold to traders/ oil pumps and illegal small factories/ refineries in different parts of KPK and Punjab.

(3) Transportation of the oil from Karak to other districts takes place in collusion with the local administration/police, especially DSP and SHO Lachi.

(4) As regards ownership of illegal refineries, the first one established in Bannu is owned by one Amanullah and the other established at Kohat is owned by one Maj Farooq Shinwari. The owners of these factories have hired services of an expert, namely, Akhtar Shah r/o Saapri Banda, District Mianwali, Punjab, who is said to have amassed enormous wealth through this practice.

(5) An organized gang hailing from Kamar Dhand, PS Gambat, Kohat is currently involved in illegal pumping of speed crude oil in the area. The gang members include Siddique Ahmed, Mian Gul & Mian Saeed Khan, Khyber Khan and Governor s/o Malik Ameer Ali Khan. The person namely Governor supplies the oil to one Hafiz Muhammad Fayyaz s/o Hafiz Noor Muhammad r/o Jhand, District Attock by greasing palms of the police officials particularly Tahir Khan, ASI/ Incharge Police Check Post Khushal Garh. Thereafter, Hafiz Muhammad Fayyaz distributes the stolen oil in different parts of Punjab including Jhand, Pindigheb Rawalpindi, Gujrat and even Kashmir, while another gang headed by one Muhammad Bilal @ Pehlwan r/o Charsadda transports the oil to Nowshera, Peshawar, Mardan and Charsadda via Nizampur Road by paying gratification to police officials of PS Gambat.

(6 ) Crude oil theft has caused huge monetary loss to the national exchequer. This malpractice needs to be discouraged/stopped with iron hand and officials involved in the crude oil theft have to be apprehended and prosecuted.

(7 ) Transparent audit / scrutiny of MOL record should be conducted to expose the staff members involved in crude oil theft and to take stern action against them."

The inquiry report further revealed that "(i) theft of crude oil was going on for a long period since exploration, (ii) the main transmission line is laid in hilly areas spreading over 130 kilo meters, (iii) the mega theft scandal is multi-faceted and the enquiry needs technical assistance and support from different stakeholders including Ministry of Petroleum & Natural Resources, Provincial Police, Management of MOL Company, local political leaders, civil society organization and others (iv) the enquiries have been conducted on the similar grounds by Special Committee constituted by the Provincial Govt of Khyber Pakhtunkhwa, joint fact finding team of PPL, OGDCL, GHPL and POL and Ehtisab Commission of KPK and (v) the FIA will conduct inquiry with the collaboration of all the stakeholders in order to unearth the true facts."

The report further states that, "the field manager and security in charge at MOL Banda Dawood Shah Karak stated that in the year 2014 a number of instances were noted where attempts were made to extract crude oil from the pipes carrying crude oil from the point of exploration to the central processing facility. Several FIRs have been registered in various police stations of District Karak and Kohat in this regard.

The MOL officers stated that presently foot patrolling is regularly carried out to avoid any such events. Periodic DCVG check of the pipeline is also carried out to detect illegal intrusion of the pipes. However currently there is no mechanism in place to measure the crude oil, gas, LPG pumped from the wells so that the same may be compared with output from the same pipe at the CPF. The security agencies have not allowed use of drones for constant visual watch of the pipe lines. They stated that they are in negotiations with a foreign firm for installation of "Pipeline intrusion detection technology" to ensure maximum security of the pipeline.

No incident or pipelines intrusion has been noted after December 2014. The security officer stated the security of MOL, CPF and the pipelines is the responsibility of Scout Security Services which is headed by Col (R) Zubair whose main office is in Islamabad. However, he has never been posted in Karak.

With regard to NASHPA Oil field (OGDCL) statements of field Manager Siraj Ahmad. Production Manager Khalid Pervez Chaudhry and other staff members were recorded. They stated that the oil field was established in 2010. There are four wells which provide crude oil to the NASHPA processing unit. No incident of pipeline instruction has been reported till date. With regard to anti theft checks at the filling point, they stated that three checks are available on the filling point, (i) Electronic flow meters record the flow of the crude oil (ii) Dip Rod checking and (iii) CCTV Surveillance.

The report further states that in response to the request FIA has taken the following steps. That Ministry of Petroleum & Natural Resources has intimated that: Kashif Ali, Deputy Director (Production) has been nominated as a focal person for coordination with all relevant departments to provide day to day assistance to the FIA.

With regard to audit of daily production reports submitted by MOL for the last five years, the Government Holding Private Limited (GHPL) (which is mandated to manage governments working interest in the upstream concessions) is being advised to nominate a team of experts to conduct the said audit and submit its report to the FIA.

With regard to oil theft through illegal enhancement of the storage capacity of the oil tankers to transport the stolen oil from the fields, the DG (Oil) is being requested to ask OGRA to constitute a team of experts with a direction to obtain copies of the carriage contract from MOL, Pakistan in order to identify and determine the veracity of the said allegation.

The Chief Secretary to the Government of KPK has been requested to extend cooperation to constitute a team of senior officers to prepare a comprehensive list of all cases which were registered in district Karak and Kohat on the allegation of theft of crude oil. The officers would collect the police files of these cases and identify the real beneficiaries. They would also prepare a comprehensive report and submit to the FIA.