KPOGCDL’s shoddy operations cause Rs500m loss to exchequer

PESHAWAR: A probe body's finding has claimed that due to haphazard approach and incompetent manpower, the Khyber Pakhtunkhwa Oil and Gas Development Company Limited (KPOGDCL) caused a loss of about Rs500 million to the exchequer.

It said the company is currently misdirected and is bound to cause loss of more time and money if immediate corrective measures are not taken. The committee led by Pakistan Tehreek-e-Insaf (PTI) Senator Nauman Wazir, an industrialist, expressed reservations over the working of the company under former Chief Executive Officer (CEO) Raziuddin.

The PTI-led provincial government terminated the services of Raziuddin earlier this month on the recommendation of the inquiry committee. The committee also asked the company to cut down its manpower and hire an experienced petroleum engineer with multidisciplinary approach to lead it.

It said the KPOGDCL mostly strived to take credit for the work being carried out by other exploration and production companies. The probe findings said a haphazard approach had been adopted for the provision of services, but no success was achieved as non-relevant, non-professional, excessive and incompetent manpower has been hired.

It added that the company caused a loss of about Rs500 million to the exchequer and wasted precious time over the last four years due to misdirected efforts, and non-relevant, non-professional, excessive and incompetent manpower.

It noted that the company depended on non-professional manpower instead of hiring competent professionals on merit. It said that over 450 persons have been engaged mainly on daily-wage basis, while 35 vehicles were purchased, most of which were not really needed given the size of the company's operations. The inquiry committee urged the company to slash down the manpower from the existing 450 to 50 and hire an experienced petroleum engineer to lead it.

The KPOGCDL was incorporated on February 4, 2013. Subsequently, the PTI-led coalition government formed the industry-based professionals working group that presented its final recommendations on October 9, 2013 to the government

However, the probe body argued that the former CEO of the company, Raziuddin, acted against the recommendations of the working group as well as the government's business plan prepared before the incorporation of the KPOGCDL.

"It rather recklessly followed so-called one window facilitator role and the 2012 Business Plan, which had inherent defects, being completely impractical, illogical, irrational, and a non-starter," the inquiry committee noted. It said the plan also suggested making immediate capital investment of about $35 million to purchase seismic data acquisition equipment and 2000 HP drilling rig, with the false hope that even without any relevant experience it would be able to use them in competition with the international service companies operating in the country.

The company also referred to a letter that Pakistan Petroleum Exploration and Production Companies Association (PPEPCA) wrote to the Federal Secretary June 3, 2016 and alleged that the reckless, directionless and irresponsible approach of KPOGCDL top management had affected the entire exploration and production operations in KP.

The probe body among other recommendations asked the company to initially focus on upstream exploration and production activity as a non-operating joint venture partner and participate in different exploratory blocks with at least 10 percent working interest in each block.

It said the company should also reduce the manpower in stages to a maximum of 50 as per proposed organizational structure and increase its strength only when justified by the workload and growth in exploration activities with the prior approval of Board of Directors (BoD).

It said qualified and experienced management should be selected purely on merit basis from the open market. It said board members should also be selected predominantly from the private sector having at least 25 yearsexperience in the upstream industry and known for their integrity.

It may be mentioned that the KP cabinet has approved the 10-member BoD of the KPOGDCL. It includes lawyer Shumail Butt, Muhammad Riaz Khan, Muhammad Arif, Zahir Azizuddin and Muhammad Ishfaq Khattak as the government member. Muhammad Ishfaq Khattak has also been named as chairman of the board. An insider told The News that the newly-formed board was weighing recommendations of the probe committee with an aim to improve the working of the company.