SOE officials being placed in govt departments

Oil industry raises concerns over conflict of interest, biased decision-making

ISLAMABAD:

The Ministry of Energy (Petroleum Division) is attempting to depute officials of state-owned enterprises (SOEs) in key government departments that deal with policies, a move that raises concerns of conflict of interest.

This comes despite the fact that the Petroleum Division issued a directive in 2020 that called for the repatriation of such officers due to the risk of undermining impartiality in decision-making.

The previous notification explicitly highlighted the dangers of those placements, stating that they created the perception of undue influence and biased policymaking.

Experts voice fear that the potential conflict of interest could cripple the energy sector, which is already teetering on the brink of collapse.

Officials of SOEs including giants like Oil and Gas Development Company Limited (OGDCL) and Inter State Gas Systems (ISGS) are being called for deputation in technical wings of the Petroleum Division. Officers of other companies like Sui Northern Gas Pipelines Limited (SNGPL) have also been deputed and even an executive of a private refinery has been placed.

Oil industry officials say the dominance of public sector companies in technical wings of the Petroleum Division jeopardises the interest of private sector competitors and stalls reforms in energy and exploration sectors.

An OGDCL employee, who was repatriated as part of the 2020 directive, has remained in his position at the Directorate General of Petroleum Concessions (DGPC) as a deputy director. He is said to have considerable influence over decisions pertaining to exploration licences, leases and third-party gas sales.

The Ministry of Energy's notification, dated April 20, 2020, clearly outlined the need for professionals from OGDCL, Sui Southern Gas Company, ISGS and Mari Petroleum to be repatriated to their parent companies.

Another directive, dated March 11, 2020, specifically mandated that officers from these companies working on an attachment basis within the Directorate Generals (Oil, Gas, PC, LGs and SP) should be returned to their parent departments within three months. These moves were made to prevent any perception of bias or influence in critical government operations.

The current regulatory environment, dominated by state-run enterprises, has driven away foreign investors and private companies, industry players argue.

Major exploration and production companies have exited Pakistan, frustrated by a system that provides advantage to the SOEs and stifles competition. As a result, Pakistan has become a net importer of energy, reliant on expensive foreign supplies to meet its demand.

Now, the ministry is placing more officials from state-owned companies for government roles. In a recent move, the Petroleum Division decided to hire officials from OGDCL, Pakistan Petroleum Limited and ISGS, and place them in the DGPC.

According to documents, six officers of these companies are slated for immediate placement. The rationale behind this move, according to the Directorate General, is the shortage of professional human resources.

International energy giants such as Shell and BP have long pulled out of the market, unwilling to operate in a regulatory environment skewed in favour of SOEs. The government must end the practice of embedding SOE officials within its ministries and regulatory agencies, experts said.

Questions were sent to the petroleum minister, the secretary and the spokesperson, but they did not respond till the filing of the story.