The Oil and Gas Development Company (OGDC) has outrightly rejected a Privatisation Commission''s proposal of entering into import business of liquefied petroleum gas (LPG) and liquefied natural gas (LNG), saying that these two businesses, as an exploration and production (E&P) company, do not fall in its jurisdiction.
Sources said that the Privatisation Commission had sent a written proposal to OGDC that it should expand its area of working and, besides looking for other profitable businesses, it should import LNG and LPG to help the country meet its growing demand of gas. In response to Privatisation Commission''s suggestion of finding some new venues for diversifying its business, OGDC said the proposal to look into the international market to import LNG and LPG does not fall in its mandate.
In a letter to the Privatisation Commission, the OGDC said: "Referring to its proposal that it--OGDC--should look into LPG and LNG import to help Pakistan meet growing energy demand, it is submitted that at present, as public sector E&P, it only has the mandate to focus on oil and gas exploration and production activities and, through enhanced production, enable the country to have maximum share of oil and gas from indigenous resources".
The OGDC added that import of any gas, including LNG and LPG, or oil rests with other public sector companies, like Pakistan State Oil (PSO), and gas marketing companies-SNGPL and SSGC. The OGDC has suggested to the Privatisation Commission that it should direct the proposal of LNG and LPG import to THE gas marketing companies-SNGPL and SSGC.
The OGDC had already opposed a Privatisation Commission proposal sometime back to float equity-linked bond to raise for it $ 1.081 billion. The OGDC board took the Privatisation Commission''s proposal out of the blue and asked the company management to convey to the Privatisation Commission that it needs not to worry about its financial matters and raise huge funds like 1.081 billion dollars to finance its exploration and production activities.
The OGDC contributes roughly 40,000 barrels crude oil and 900 mmcfd gas to meet the energy demand of the country. Any venture like raising money from the international market through equity linked bond can add to the company''s liability without adding to its profitability. Now again asking OGDC, whose mandate is limited to exploration and production activities to tap maximum potential of the country to add maximum share of indigenous resources and reduce dependency on import to meet fast growing oil and gas demand, shows that the Privatisation Commission is wasting time on non-issues, or its officials were ignorant of the working of the public sector departments like OGDC and gas marketing.