ISLAMABAD: Petroleum Exploration Limited (PEL) says Frontier Holding Limited (FHL), Spud Energy Pty Limited (SPUD) and JEC allegations against the company for illegal sale of gas have been unfounded and any allegation regarding alleged losses to the treasury on the part of PEL is ill-founded.
In a statement, PEL has invested substantial amounts in E&P activities in Badin North and South, which has resulted in two discoveries. Which demonstrates PEL’s continued commitment to honoring its obligations with the GoP.
Proceeding FHL’s instigation of ICC Arbitration and being involved in the sale of illegal gas through its affiliate SPUD, FHL launched a complaint against PEL to malign its reputation and to unnecessarily engage the DGPC in investigating an unfounded complaint. The committee constituted to investigate FHL’s false complaint included Member DG Gas, who is implicated in this matter due to the members failure to exercise the right to nominate a gas buyer for the gas from Badin South when requested to do so by PEL.
It is critical to state that PEL in compliance with the Rules, duly notified the authority to nominate a gas buyer for Badin South, which was to be undertaken by DG Gas. Who failed to undertake said nomination within the 90 day time period stipulated within the regulations.
During the course of the committees investigation it became apparent that the rogue members of the committee intended to pursue their own agenda and in violation of the due democratic process issued a report which was in stark contradiction to the report of issued by the chair of the committee.
The rogue members went as far as signing and attempting to submit their report without the approval and consent of the chair. As a result of this clear conflict of interest on the part of the committee members, the Minister order for the reconstitution of the committee. In which the aforementioned conflicted members were not included.
However, as a result of the rogue members behavior PEL regrettably had to procure a stay order against the investigation and constitution of the committee issued by the Islamabad High Court. As a result of this stay order, the DGPC is expressly prohibited from undertaking any investigation or forming any committee. Furthermore, it is clear that PEL is not prohibited nor restricted from the sale of gas from the Badin IV South Concession.
Moreover, FHL continuing its practice of default has a long standing history of defaults in the Badin IV South and North Blocks dating back to 2011. It was in light of these factors that the Operator, PEL, in compliance with the Badin IV South and North Petroleum Concession Agreements issued Default Notices to FHL on account of FHL’s default of its financial obligations, namely the payment of its monthly cash calls. This default resulted in the Forfeiture of FHL’s working interest in the Badin Blocks. It is pertinent to mention that the ICC Arbitration initiated by FHL in this regard was dismissed by the ICC tribunal. In which all claims and disputes were rejected in their entirety.
This Forfeiture is in due process with the competent authority. As a consequence of the which, FHL is no longer receiving any payments from the Govt. nominated gas buyer. This fact alone demonstrates that FHL is no longer recognized as the rightful party entitled to any revenue in the Badin IV Concessions.
As of date, FHL has no valid licenses and no producing assets, and as further evidence of their financial defaults FHL has recently assigned its working interest in Zarghun South and Nareli to Mari Petroleum in return for which they received no cash consideration. Instead Mari Petroleum assumed their outstanding obligations in the aforementioned Concessions. With no petroleum assets to speak of, it is clear that FHL and SPUD no longer intend to continue operations in Pakistan.
Article titled ‘Ministry approached to halt gas sale at Badin’ published in Business Recorder on August 29, 2024 is based solely on the information provided by FHL and its affiliate SPUD which are wholly owned subsidiaries of Jura Energy Corporation (JEC).
Copyright Business Recorder, 2024