Efforts to stop oil theft in K-P go in vain

Minister claims Rs6-8b worth of gas is stolen annually in Karak

ISLAMABAD: Efforts of the federal and Khyber-Pakhtunkhwa (K-P) governments to resolve the crude oil theft issue have come to naught as the provincial police could not extend a helping hand to the Federal Investigation Agency (FIA).

Over the past two years, the National Assembly Standing Committee on Petroleum and Natural Resources has repeatedly taken up the matter of oil stealing from installations of MOL oil and gas exploration company in Karak district of K-P, but it could not reach any conclusion.



Expressing his displeasure in a meeting, Committee Chairman Chaudhry Bilal Ahmed Virk blamed the K-P government, saying the province sent different representatives for assistance of the committee.

Earlier, an FIA official complained that the K-P police were not inclined to cooperate, therefore, theft cases must be referred to the National Accountability Bureau (NAB) for a comprehensive probe.

K-P Home Secretary Shakeel Qadir Khan revealed that a case summary had been sent to Chief Minister Pervez Khattak for taking action on the matter.

He argued that it was not just the theft of oil, but was more than that. “It is causing financial loss to the national exchequer and bringing down royalty earnings of the province,” he said.

Khan claimed that the provincial government had no knowledge of the type of agreement reached between the federal government and Hungarian company MOL and the nature of licence issued to the company in 1997.

He pointed out that no meter had been installed on the wellhead to gauge the production level and the quantity supplied to storages.

Responding to the arguments, a representative of the Directorate General of Petroleum Concessions, which works under the Ministry of Petroleum and Natural Resources, stressed that a multi-flow metering system had been installed at the MOL production site and its data was shared with the government every day.

Petroleum Minister Shahid Khaqan Abbasi, while defending MOL activities in Karak, said the K-P government had nothing to do with oil and gas production in the district.

He told the local administration in Karak to bring the law and order situation under control, alleging that Rs6 to 8 billion worth of gas was stolen annually in the district, but police failed to take preventive measures. “MOL’s share is only 8% and it is just an operator of the field,” he said.

Abbasi dismissed the statement of another K-P representative who claimed that the province had given Rs171 million to Sui Northern Gas Pipelines (SNGPL) for gas supply to Karak and Hangu districts. “No money has been deposited with the gas utility,” he remarked.

The minister said SNGPL would receive Rs108,000 per consumer and the rest would be shared by the provincial government.

The company has turned down a proposal of the K-P government, which offered to arrange a loan from the Bank of Khyber for gas supply schemes in the province.

The minister insisted that provinces were obliged to spend at least 10% of royalty on oil and gas producing districts. “This amount could be utilised for gas connections in Karak and Hangu,” he said.

To seek a solution to the continuing theft, the standing committee chairman asked the Ministry of Petroleum and K-P administration to sit together and try to find common ground. MOL management would also be part of the talks.

A MOL representative insisted that they had an effective monitoring system in place and had registered FIRs against oil theft. “Protests in Karak were not against the company, but these were against unavailability of gas,” he said.



He revealed that MOL had 8% shares in the Karak field whereas state-owned Oil and Gas Development Company had a 23% stake.

However, it remains unclear how MOL had become the field operator despite having minority shares.

Published in The Express Tribune, April 5^th, 2017.

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