Pakistan People's Party has alleged that the Oil and Gas Development Company (OGDC) has declined to exercise its right of pre-emption as a foreign company that partly owns the Badin oilfields sold its interests to another foreign company.
In a statement on Saturday, the spokesperson of the party, Farhatullah Babar, said that it was most unusual, and the matter needed to be probed. The Badin oil and gas fields have been owned for the past 30 years by Oil and Gas Development Company Ltd (OGDC) and two foreign companies, Occidental and British Petroleum (BP).
The Badin fields have been and continue to be prolific producers of oil, he said. It made sound business proposition for OGDC to exercise its right of pre-emption and acquire a right from the Occidental when the latter decided to sell its interests to BP. "It is most surprising that the OGDC has reportedly declined to exercise its right of pre-emption, and allowed lucrative interests pass to others," he said.
The right of pre-emption is enshrined in virtually every petroleum contract in Pakistan. There can be no rational, technical, commercial or business reason why OGDC should not exercise its right of pre-emption, especially when it is continually seeking to increase its activities in Pakistan and abroad, he said.
In fact, the right to acquire a right in a producing field in the present high price petroleum environment is a valuable right and would invariably be exercised by any business concern operating on sound basis, he said.
He said that the decision has caused significant financial loss to OGDC, the Government of Pakistan as majority shareholder, and the Pakistan public as minority shareholders. The reports need to be investigated, he added.