Panel seeks 20-year gas royalty record

Senate sub-committee asks OGDCL to submit production data

KARACHI:

The subcommittee of the Senate Standing Committee on Petroleum on Friday sought a 20-year breakdown of royalty payments made by oil and gas companies to provincial governments, directing the Petroleum Ministry and Sindh government departments to furnish complete details at its next meeting.

The subcommittee, chaired by Jam Saifullah Dharejo, met at the Sui Southern Gas Company (SSGC) office, where it examined royalty payments, production bonuses and employment opportunities for local residents in areas hosting exploration activities.

Dharejo directed the Petroleum Ministry and Sindh government's finance and energy departments to provide records of all royalties received over the past two decades. He criticised the Oil and Gas Development Company Limited (OGDCL) for submitting only aggregate royalty payments for a 10-years.

He asked the OGDCL to provide production figures and corresponding royalty calculations through its chief financial officer. He also directed the company to furnish production and royalty data dating back to 1995, when it began operating in the area.

Senator Quratulain Marri questioned the OGDCL's failure to pay production bonuses, saying the company had claimed exemption from the requirement. An OGDCL representative told the meeting that the Directorate General of Petroleum Concessions (DGPC) had exempted fields producing between 1990 and 1993, while the company had paid bonuses on fields discovered subsequently.

The representative said the exemption applied to the OGDCL's Sinjhoro Block in Sanghar, where a petroleum concession agreement was signed in 1997, and did not extend to other companies.

Dharejo sought clarification from the DGPC on royalty calculations, the destination of payments and independent audits of production figures. A DGPC representative said the applicable royalty rate was 12.5%, with companies depositing payments into the federal government's account.

The Finance Division deducts 2% as collection charges before transferring the remaining amount to the relevant province within 15 days, according to its share, the official said, adding that the DGPC calculates royalties monthly and conducts audits.

The official added that a detailed review report containing royalty figures for the past 15 years would be submitted. Dharejo also questioned OGDCL's objection to production bonuses, describing them as a form of corporate social responsibility that could support schools, hospitals and other public services in areas affected by exploration.

National Assembly member (MNA) Zulfiqar Sattar Bachani told the panel that the United Energy Petroleum and the OGDCL were exploring for oil and gas in Tando Allah Yar, with wells located within a five-kilometre radius, but no survey had been conducted.

He called for local residents to be given preference in lower-level jobs. Dharejo directed the Petroleum Ministry to ensure compliance with laws governing local recruitment, particularly for non-technical positions.

A ministry official said local people were given preference for non-technical jobs and provided training through corporate social responsibility programmes. The OGDCL had been extending CSR funding since 2019, while Mari Energies and other companies were also contributing to a social welfare fund.