ISLAMABAD: The Auditor General of Pakistan (AGP) has asked two oil and gas exploration companies to clear their royalty before the matter is referred to the FIA and the NAB, sources said.

During the audit of DG (PC), Islamabad, for the fiscal year 2020-21, it was observed that DG (PC) did not recover the royalty on oil and gas from nine E&P companies in 40 fields.

This resulted in non-realisation of royalty amounting to Rs10.7 billion. M/s Spud Energy defaulted on account of payments of royalty pertaining to previous year but the DG (PC) did not initiate any action except issuing a letter for realisation of royalty.

In another case, the DG (PC) did not recover fine on late payment of royalty on oil and gas from the GHPL in Gambat South Block under E&P Rules 2009. This resulted in the non-realisation of royalty and subsequent fine amounting to Rs0.6 million.

The audit says: explain reasons for inaction against M/s PEL who has not been making payments of royalty since 2015. The audit asked to expedite the recovery of the outstanding royalty of Rs4.2 billion from the concerned E&P companies, especially M/s EL.

Copyright Business Recorder, 2023