PPP demands probe into cut in indigenous oil, gas producton

ISLAMABAD: The Pakistan People’s Party (PPP) Sunday condemned the unexplained reduction in the indigenous production of gas and crude oil thereby causing huge loss to the national exchequer by increased imports of LNG besides causing huge loss to the provinces in terms of lost royalty.

"Any reduction in the indigenous production of oil and gas means corresponding increase in expensive LNG imports, increase in the power bills and pressure on limited foreign exchange reserves and the move appears to have been made to benefit the powerful importers of LNG at public expense," said Secretary General of PPPP Senator Farhatullah Babar in a statement on Sunday.

He said that according to reports, crude oil production from wellheads in Khyber Pakhtunkhwa (KP) was quietly cut by 10,000 barrels and of gas by 80 million cubic feet a day in December last year by the federal authorities. The move came to surface only because of a recent decision of the Council of Common Interests (CCI) to disclose production details, he said.

Deliberately cutting down indigenous production is aimed at benefitting the LNG lobby at the expense of the poor of the country, is misuse of authority besides damaging the wellhead infrastructure that must be probed and those involved must be prosecuted, he said.

Farhatullah Babar said that Article 172 (3) lays down that mineral oil and natural gas within the province shall vest jointly and equally in that province and the federal government.

Late last year the federal government tried setting up a regulatory authority for controlling the lucrative petroleum rights divesting the provinces of any role.

The move was however thwarted by the Senate, he said. Since 2014 neither a single block out of 35 pending blocks had been offered to bidding nor the existing leases, which had expired, were renewed.

This played into the hands of LNG importers even though it caused a loss of billions to both federal and provincial governments in royalty, he said and demanded probe into the matter.