The Ministry of Petroleum, finding it difficult to resist the pressure of bigwigs and LPG companies' lobbyists, has suspended work on two important gas fields, Kunar-Pasakhi Deep and Tando Allahyar, Business Recorder has learnt.
Sources said Arshad Nasar, former chairman of Oil and Gas Development Company Limited (OGDCL) was fired upon resisting the move of the Petroleum Ministry putting on hold the bidding process to bring in some 'like-minded' parties by re-tendering supplies of Kunar-Pasakhi Deep Gas Field.
According to documents made available to Business Recorder, the Petroleum Ministry had directed the OGDCL management to put opening of bids for the Kunar-Pasakhi Deep Gas Field on hold for two weeks in July 2008 after an advice received in a secret letter from one Muhammad Ramzan with no designation from any organisation.
Sources maintained that it was shocking disclosure that the Petroleum Ministry stopped bidding for two weeks that was annulled later considering them as 'allegations' levelled by him. "The Petroleum Ministry stand to put on hold bidding reflects no personal point of view," sources said and added that the bidding was stopped just to please one person who even failed to disclose his contact information.
"After putting on hold the bidding process, OGDCL had decided to club together Tando Allah Yar Oil with Kunar-Pasakhi Deep Gas Field after former chairman Arshad Nasar was fired," sources said, adding that till that time, no re-tendering took place for these two oil and gas fields which were ready to produce oil and gas.
"This practice on the part of the Petroleum Ministry to please LPG sector magnets had also been a source of litigation," sources added. In a letter written to the Ministry of Petroleum and Natural Resources, former OGDCL chairman said the project was under development on a fast track basis in accordance with OGDCL Board of Directors' nod, the government of Pakistan approved the field development plan and the LPG Production and Distribution Policy, 2006 as amended.
OGDCL pursuant to the Ministry of Petroleum and Natural Resources advice put the opening of bids for the Kunnar-Pasakhi gas field on hold for two weeks. Bids were to be opened on July 7, 2008. He had warned the Petroleum Ministry that the postponement would delay the scheduled completion date of this project being developed on fast track basis. "It is indeed unfortunate and regrettable that a project of such great national importance should be delayed and adversely affected on the basis of a letter that barely disguises the writer's real motives which pivots around vested LPG extraction interests and does not disclose even his contact information," the former Chairman said in a letter.
He said OGDCL has probed the matters raised in Ramzan's letter and had arrived at the firm conclusion that the allegations and assertions were wholly unsubstantiated and without merit. Ramzan's suggestion that the tender for the project be cancelled and fresh tenders be invited so that LPG extraction and gas production are developed separately, is obviously, motivated.
According to the letter, there has been no unaccounted for delay in the fast track development of the Kunar-Pasakhi Deep Gas Field attributable to OGDCL. The tender was first floated on February 17, 2008. Bid closing date was April 30, 2008 and the bid closing date was first extended to June 25, 2008 on the request of five of the potential bidders who wanted additional time to prepare their bids. The bid closing date was further extended to July 7, 2008 at the request of three of the potential bidders following changes in the federal budget.
"The third delay is caused by the ministry's advice dated July 6, 2008 to put on hold the opening of bids," he revealed in a letter in which he rejected the allegations that there were any shortcomings in the tender. He said Ramzan's allegation was wholly unsubstantiated and was rejected in the strongest possible terms.
"His letter does not enumerate even a single instance of deficiency in the tender documents or the tender process itself," he said, adding that OGDCL's management is striving to ensure transparency in its tendering processes and compliance with applicable laws and internal procedures. In case of Kunnar Pasaki Deep development project the tender documents have been prepared in accordance with law and national and international best practices by ILF.
The tender is in complete compliance with the government policy on the subject as laid down in the LPG Production and Distribution Policy, 2006 as amended. In particular, it is in accordance with Section 3.1 of the policy as amended by the ECC on February 25, 2008, which provides as follows.
"3.1 Public sector E&P companies shall exercise their rights to set up LPG extraction facilities at gas fields where LPG can be commercially extracted in accordance with development plan approved by the government."
"It is our considered view that Ramzan's letter can at best be described as a malicious attempt to compromise OGDCL's transparent, fast track process to complete a project of national importance which upon completion will make a significant contribution to the national economy by producing 3200 barrels of oil per day, 250 mmscf of gas per day and 250 metric tons of LPG per day, he said.
As stipulated by the policy, OGDCL has exercised its right to include LPG extraction within the scope of the project, with requisite board and government approvals, and as such the tender documents have been carefully designed to develop the project on a fast track basis in accordance with the direction contained in Ministry of Petroleum and Natural Resources letter, reference NO.LPG-6(5)/07-P-Price Vol-IV dated March 8, 2008.
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