Razgar Fields: POL objects to Hungarian company selling gas to private firm without bid

Hungarian company cannot sell gas unilaterally without competitive bid, as this process will be non-transparent, reads POL letter

By Saif Ur Rehman
January 05, 2025
A representational image showing a technician working at a gas field. — AFP/File
A representational image showing a technician working at a gas field. — AFP/File

ISLAMABAD: Pakistan Oilfields Limited has raised objections to a proposed agreement by a Hungarian gas production company to sell gas from Razgar Fields in Kohat to a local private company without a bid.

POL has written a letter to the Petroleum Division, along with other companies involved in the joint venture. Pakistan Oilfields is a 25 percent partner in the Razgar gas field. According to sources, the letter states that the Hungarian company cannot sell gas unilaterally without a competitive bid, as this process will be non-transparent.

According to sources, Pakistan Oilfield has raised objections in the letter to the Hungarian company selling gas without a bid. The Hungarian company is the operator of the Razgar field located in Kohat, while this giant venture includes POL, OGDCL, PPL and GHPL.

According to sources, the Hungarian company is in the process of signing an agreement to sell 35 million cubic feet of gas per day to a local private company. The government companies have a 65 percent stake in the Razgar gas fields, the Hungarian company has 10 percent, and POL has 25 percent. The Hungarian company is also selling 14 million cubic feet of gas from its Mamikhel field to the same local private company under an agreement signed without any competitive bidding.

The local company purchases gas from a Hungarian company and sells it to private consumers in Punjab, for which the Sui Northern distribution system is used. According to experts working on gas retail contracts in Pakistan, the agreement with only one company is also a violation of PEPRA laws. The agreements already made between these companies should also be investigated.

They said that the Hungarian company is definitely the operator in the gas fields located in Kohat, but there is no freedom of agreements with any single company. They further said that gas purchase agreements without bidding from gas fields based on government partnership will have no legal status.