In a major development, the government has appointed Elengy Terminal’s CEO Sheikh Imranul Haque as the new managing director of Pakistan State Oil (PSO), triggering a debate in the industry about merits and demerits of the decision.
“Prime Minister Nawaz Sharif considered his name and approved it on Thursday night,” two different industry sources close to the PM Secretariat told The Express Tribune.
The tenure of the previous PSO MD Shahid Islam expired on April 30. He had been heading Pakistan’s largest fuel marketing company on a temporary basis since the government changed the management earlier this year following petrol shortage crisis, which was particularly severe in Punjab.
The Ministry of Petroleum and Natural Resources sent a summary containing three names for the prime minister to consider on April 27, said Shahid Khaqan Abbasi, the Minister of Petroleum and Natural Resources.
“I cannot divulge these names. That is confidential information and something for the prime minister to decide,” he said. “But Sidat Hyder (the management consulting firm) headhunted six people for us and we forwarded three names.”
Industry sources, including PSO officials, say the other top contender was Wasi Khan, who oversees Byco’s oil trading business. Third person on the list was Qaiser Jamal, a former Byco official who is widely respected in the crude refining industry.
The other three men recommended by Sidat Hyder included Irfan Qureshi, former managing director of PSO, Sohail Wajahat, who for a long time led Siemen’s business in Pakistan and Shahrukh Hasan, the Group Managing Director of Jang and Geo TV.
As the news of the high-profile appointment reached Karachi, anxiety spread among employees of state-owned PSO.
“This is a terrible situation. Five managing directors have come and gone in as many years. We have lost sight of our strategic targets,” remarked an employee.
Imranul Haque’s appointment is of particular concern for many. He comes from a private company, which has its fate closely linked to PSO.
Engro’s subsidiary Elengy Terminal Pakistan Limited inaugurated the country’s first liquefied natural gas (LNG) terminal in March. Its purpose is only to operate the terminal whereas the government has designated PSO to arrange LNG shipments, which is a multi-million-dollar programme.
Despite repeated attempts Haque did not respond to phone calls and messages.
Pakistan’s largest company in terms of revenue, PSO has been dragged into the LNG business despite resistance from senior employees.
“We must continue to focus on our core petroleum marketing business. There is so much potential in lubricant business and no company other than PSO with its 3,600 retail outlets can exploit it,” a senior employee said.
Not a bad choice
But another senior PSO official said Haque might not be a bad choice, especially considering the need to immediately import LNG to counter the crippling energy shortage.
“No one should doubt Haque’s integrity. He rose among others in Engro and that should be enough about the man’s credibility,” the official said.
Industry people also say Haque’s appointment should not come as a surprise for those closely following the news surrounding the LNG terminal.
The fact that the fast-track LNG project became operational despite so many hurdles is a testimony of support it had from the petroleum minister.
This is the first gas import project to see the light of day since efforts aimed at bringing LNG supplies began in 2005. All the previous projects were consumed by allegations of bad governance.
Nevertheless, issues remain in the LNG supply chain. PSO imports almost all the furnace oil, which is used to run power plants. That involves hundreds of billions of rupees that often get stuck in the inter-corporate circular debt.
“But at least PSO knows who owes the money and how much. All of that can be recorded on books. As things are at the moment, that’s not the case with LNG,” said the official.
Published in The Express Tribune, May 2nd, 2015.