Mari Gas tries to keep Auditor General away from its accounts

Firm once again tries to double funds provided by provincial govt.

Our Correspondent May 09, 2012

ISLAMABAD: After having already faced rejection, Mari Gas Company Limited (MGCL) has stepped up the ante and has doubled its funds for exploration activities provided by the provincial government and keep Auditor General of Pakistan (AGP) away from its accounts.

Sources said that the petroleum ministry was forced to take back a summary from the Economic Coordination Committee (ECC) so that the condition of conducting audit through Auditor General of Pakistan (AGP) could be abolished.

The federal government has been providing $20 million to Mari Gas for many years to expedite exploration activities by deducting the amount from Gas Development Surcharge (GDS) that is to be given to the provinces. The company’s accounts is not audited by the Auditor General of Pakistan (AGP) and its management had been awarding lucrative bonuses to its executives under the garb of these exploration expenditures, a senior petroleum ministry official told The Express Tribune.

Meanwhile, Sindh is showing reluctance to enhance expenditure limit of Mari Gas from current $20 million to $40 million per annum, a sum that will be provided from the provincial share of GDS.

The petroleum ministry had moved a summary to ECC for increasing the expenditure limit in a meeting held on January 20, 2012, however, it was turned down after Federal Minister for Water and Power Syed Naveed Qamar strongly opposed it. Qamar did, however, demand to table it before Council of Common Interest (CCI) to take provinces on board.

“The petroleum ministry had again moved a summary in the first week of April to get approval of enhanced expenditure limit for Mari Gas with a condition to conduct audit through Auditor General of Pakistan,” sources said adding that the auditor general condition was subsequently removed by the ministry after pressure from Mari Gas.

The major shareholder Fauji Foundation got to the ministry and put pressure on it to remove the clause. In Mari Gas Company, government has 20% share, Oil and Gas Development Company Limited 20%, Fauji Foundation 40% and the general public hold 20% through scrips listed on the stock exchange.

Fauji Foundation had approached the petroleum ministry claiming that it was a charity organisation and therefore Mari Gas accounts could not be audited through auditor general of Pakistan.

A senior official of the petroleum ministry told The Express Tribune that Mari Gas Company is enlisted as a private company and therefore its audit could not be conducted through Auditor General of Pakistan. He said that wellhead price of Mari Gas was very low at Rs 56 per Million British Thermal Unit (MMBTU) and therefore it required enhancement in expenditure limit to expedite exploration activity. He maintained that Mari Gas management had claimed that it had been conduct audit through audit firm and therefore parallel audit would not be possible.

“Sindh would not face any hit relating to collection of GDS on gas as it would get more revenue after Mari gas discovered more gas in the province,” source added.

“Oil and Gas Regulatory Authority (Ogra) and the Ministry of Petroleum should devise some effective mechanism to stop plundering of public money and some efficiency benchmarks should be set for the money earmarked for exploration activities by Mari Gas,” sources added.

Published in The Express Tribune, May 10th, 2012.


Hedgefunder | 9 years ago | Reply

Is this a nationalised company? If so, on what basis can the Audit be not conducted ? I am baffled as to who really runs this country !!!!

AsifAmeer | 9 years ago | Reply

>>Mari Gas tries to keep Auditor General away

Hmm.. I guess its a primitive way of running an SIV

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