Pakistan’s Biggest Oil Exploration Companies are Working Without Proper MDs

Energy is the primary reason for the country being in crisis today. Yet; it is interesting that the two major exploration and production (E&P) companies namely: Oil and Gas Development Company Ltd. (OGDCL) and Pakistan Petroleum Ltd. (PPL) both owned by the Government of Pakistan are being run on an ad-hoc basis.

OGDCL is being run by Khalid Subhani on an acting charge as a stop-gap measure since September of last year. While the current MD is also managing PPL on an acting charge since January 2019 getting 6 monthly extensions even after reaching the age of retirement. Appointments for such positions as per the constitution of Pakistan can only be made or extended by the approval of the Federal Cabinet yet; these individuals enjoy their perks and privileges without any such approvals.

Since the coalition government has taken over, the prime minister himself has held the portfolio of the energy division therefore, he is directly overseeing all matters related to this particular ministry. With such a huge energy crisis in the country, the PM is expected to make such appointments on war footing yet that is not the case.

Highly placed officials at the petroleum division have said on the condition of anonymity that the summaries of both the appointments along with recommendations of the ministry have been sent to the Prime Minister’s Office for a couple of months yet the appointments are still to be finalized. The PM has said on many occasions that “Pakistan Speed” will be introduced to make fast decisions yet the two major companies with an estimated combined earning of almost $1.5 billion net profit are without permanent MD.

The performance of both companies has been dismal with no major discoveries in the past 5 years leading to a significant drop in their annual oil and gas production, and profitability, therefore, translating into falling share price. New and professional MDs need to be put in place so that they can turn around these companies and improve the shareholder’s value which in this the biggest benefactor would be the government itself.

Both companies can help reduce reliance on foreign imported oil and gas while they can also expand their exploration activities outside the country to ensure energy security in the future. This is only possible under strong and professional management that is hired on the basis of merit and experience as opposed to influence.

Recently OGDCL staff and officers went on strike for over a week against the current acting MD demanding that a permanent MD be appointed in his place while also, demanding that contractual staff should not be made permanent.

OGDCL’s spokesperson told ProPakistani, “Performance of OGDCL is not dismal. Profitability is being maintained despite challenges. Operations in security-sensitive areas are underway. Seismic activities are in full swing as per the business plan. Production enhancement measures and monetization of discovered hydrocarbons are on a fast track.”

He added, ” OGDCL continues to be the largest E&P company in the country with the highest production and profitability.”

“Regarding the appointment of CEO, the matter is under process with the Federal Government. The board of directors has already forwarded a panel of candidates for concurrence as per rules. OGDCL employees will continue to strive for achieving greater heights,” he added.

The PM should bring in a fresh set of MDs who can run these companies with honesty and professionalism as they are both publicly listed entities and should be the pride of corporate Pakistan. These are the companies that have the scale and size to help Pakistan come out of its crisis.