ISLAMABAD: The government has recovered an outstanding royalty amount of Rs1.4 billion from two oil and gas firms, Spud Energy and Frontier Holdings Limited (FHL), Pakistan Today reliably learnt on Sunday.
According to sources of petroleum division, following the orders of Prime Minister Shehbaz Sharif to recover an outstanding royalty amount of Rs 1.4 billion from two oil and gas firms, Spud Energy and Frontier Holdings Limited (FHL), Petroleum Division’s Director General Petroleum Concession (DGPC) has taken a prompt action and recovered the pending royalty amount from the two oil and gas companies.
Sources said that DGPC, in a letter dated February 7th, 2023, has directed the Managing Director (MD) Sui Southern Gas Company Limited (SSGCL) to deduct the pending royalty amount of Rs 808,556,999 (PKR eight hundred eight million five hundred fifty six thousand nine hundred ninety nine only) from the invoices due to Spud Energy in respect of Zarghun South and Guddu Block and Rs 216, 315,972 (PKR two hundred sixteen million three hundred fifteen thousand nine hundred seventy two only) from the invoices of FHL for the settlement of outstanding royalty obligations in respect of Badin IV South Block and deposit the same in the government treasury under the head of Account C- 03906. And, MD SSGCL has now shared the pending royalty payment confirmation with the DGPC, they added.
“The role of Prime Minister Shehbaz Sharif, DGPC and MD SSGCL in protecting the interest of the Government of Pakistan by recovering the pending heavy royalty amount from the royalty defaulters (Spud/FHL) is truly commendable,” said the sources.
Immediately carry out an investigation into the outstanding amounts owed by FHL-SPUD to public companies including Oil and Gas Development Company (OGDCL) and Mari Petroleum Company Limited (MPCL) as suggested by a law firm named as Ahmer Bilal Soofi & Co., they added.
Sources further said that OGDCL and MPCL are not recovering millions of dollars that are owed by FHL-SPUD on account of outstanding cash calls while there is a dire need stop any pending assignments of FHL-SPUD including Hanna and Zamzama North as these two oil and gas companies are trying to take their working interests in these blocks.
Documents available with Profit disclosed that MPCL had earlier requested the Director General Petroleum Concessions (DGPC) to allow the MPCL to assign 35% of its working interests in Hanna Block to Spud Energy from its 100% working interests and also submitted un-signed draft Deed of Assignment (DoA) and unsigned annexures for the same.
The petroleum division forwarded a summary with the title ‘Assignment of Working Interest in Exploration Licences/Blocks’ to the PM, being Minister In-Charge of petroleum division and requested the premier to authorise submission of the summary to the cabinet.
However, the PM’s office after seeing this summary directed the petroleum division to address several observations before the summary is submitted to the Economic Coordination Committee (ECC) of the cabinet for its consideration.
Pakistan Today/Profit has approached Chief Executive Officers (CEOs) of MPCL and a spokesman of OGDCL but, both companies did not respond despite repeated efforts to obtain their stance on the matter pertaining to pending amounts with Spud/FHL.
It is pertinent to mention that a famous law firm known as Ahmer Bilal Soofi & Co (ABS & Co) has written a letter dated February 7th, 2023 to Prime Minister’s Office (Pakistan), Principal Secretary of Prime Minister (PSPM) and filed a complaint against the parent entity of “Frontier Holdings Limited & Spud Energy Private Limited” the Jura Energy Corporation (JEC) on behalf of the minority shareholder (Aggrieved Shareholder) who wishes to elucidate the magnitude and voluminous nature of the indiscretion, malpractice and benevolent behavior adopted by the Board of Directors of JEC and its wholly owned subsidiaries SPUD Energy Private Limited (SEPL) and Frontier Holding Limited (FHL) to act of independent of duty, function and practice that coincides with overarching principles of Good Corporate Governance and Compliance.
According to ABS & Co. letter/complaint to PM of Pakistan, a copy of which is available with this scribe, JEC along with its subsidiaries FHL & SEPL (Spud) have been involved in an active deliberate concealment and misrepresentation of actual position in its financials. And, a complaint has also been submitted against JEC before the Alberta Securities Commission (ASC) and Toronto Stock Exchange-Venture Exchange (TSX-V) in Canada.
“We have come across the expansive scale of fraud & syphoning of funds are at play at JEC, while the royalty obligation remains outstanding. It appears that the subsidiaries of Jura Energy i-e FHL & SEPL have been the primary source of such fraudulent, evasive and malpractices by reason of siphoning of funds back to JEC and the Parent’s failure to reflect outstanding royalty obligations. Thereby, as per the laws and governance code, JEC has breached the disclosure policy of the necessary and updated material and financial information, said ABS & Co. letter to PM’s Office.
