ISLAMABAD: The National Accountability Bureau (NAB) has launched a comprehensive investigation into the alleged malpractices of FHL-SPUD, a petroleum company, following serious concerns raised by various stakeholders. NAB, in a letter dated 9th June 2023, has requested the Petroleum Division of the Energy Ministry to provide a detailed report on the matter by 21st June 2023.
The investigation focuses on several irregularities attributed to FHL-SPUD, which include willful default on outstanding obligations resulting in a loss of 1.13 billion PKR to the national exchequer. Furthermore, the company is accused of deceiving the Ministry of Energy by withholding information about pending assignments in exploration and production (E&P) blocks.
The Prime Minister’s Office has expressed grave concern over FHL-SPUD’s alleged deceit, prompting the issuance of show cause notices and default notices to the company. It has been discovered that instead of fulfilling their obligations to the government, FHL-SPUD paid off shareholders’ loans amounting to millions of dollars and charged consultancy services to their subsidiaries, potentially diverting funds out of the country.
To aid in their investigation, NAB has invoked Section 27 of the NAB Ordinance, 1999, and has requested the Ministry of Energy (Petroleum Division) to provide the necessary information on the matter.
Additionally, the Ministry of Energy (Petroleum Division) had previously taken action against FHL-SPUD on 17th February 2022 by declaring them royalty defaulters. Notices were subsequently issued to major oil and gas buyers, namely Sui Southern Gas Company Limited (SSGCL), Pakistan Refinery Limited (PRL), and Engro Fertilizer Limited (EFL), instructing them to withhold payments to FHL-SPUD and deduct the outstanding royalty amount from future invoices.
Transparency International (TI) Pakistan has also conducted its own investigation into the matter, alleging collusion between government officials and private companies, leading to a loss of 1.13 billion PKR to the national exchequer. TI Pakistan lodged a complaint on 16th December 2022 and has since written letters to the Prime Minister of Pakistan, urging immediate action to recover the outstanding amount.
Responding to the public outcry, the Prime Minister’s Office intervened on 12th January 2023 and instructed the Secretary of the Petroleum Division to ensure the recovery of the outstanding amount from FHL-SPUD within two weeks. FHL-SPUD was declared as defaulters, and all pending applications and approvals by the company were halted.
The Prime Minister’s Office has issued subsequent reminders to the Ministry of Energy, urging compliance and regular reporting on the progress of recovery efforts.
