ISLAMABAD -  The Audit General of Pakistan in its audit pinpointed several irregularities in the account of Director General Petroleum Concessions (DGPC) and irregular appointments in the directorate.

According to the finding of the audit report presented by the Auditor General of Pakistan the DGPC renewed eight leases of M/S OGDCL without imposing financial obligations leviable under Pakistan Petroleum (production) Rules, 2001 whereas in 12 extensions of leases, financial obligations had been imposed. The irregularity/lapses resulted in a disparity between different leases extended/renewed and resulted in revenue loss of Rs449.08 million.

It is pertinent to mention here that aforesaid amount was to be utilised for the welfare of the concerned areas. The irregularities/lapses were pointed out to the department in December 2015. It was replied that the issue of applicability of financial obligations was being examined and relevant details would be shared with audit shortly, but no progress was intimated till the finalisation of this report.

Inadmissible/unjustified transfer of training fund to foreign accounts was also pointed out by the audit. According to the provision of annexure VII of the Pakistan Petroleum (Exploration and Production) Rules, 2001 training was to be provided to Pakistani employees and GoP officials by the foreign and local exploration companies. A minimum expenditure of $10000 per licence year during exploration stage till commercial production (pre-commercial production stage) and $25000 per lease year during the post commercial production stage was to be incurred which was subject to review from time to time. The unspent training amount during a year, unless agreed otherwise, was to be deposited into a special account maintained for the purpose by the DGPC.

The audit report further said that DGPC directed M/s UEPL to deposit outstanding amount of training fund directly to a foreign bank account and to pay cash directly to a legal advisor and a local lawyer on account of TA/DA but such payments were not being reflected in the cash book of training funds. The irregularity/lapses resulted in illegal/unjustified transfers and payment from training funds.

DGPC replied that all the payments had been made after proper approvals from the competent authority to the legal advisor and the lawyers appointed to deal with Pro gas arbitration case.

Auditor General Department was of the view that the matter was doubtful and needed justification as no record of these transactions was available in the cash book of training fund. Moreover, as per rules/policies, unspent obligations of training funds should have been deposited into a special account maintained for the purpose.

Similarly in another case of improper utilisation of training funds Rs699.14 million were irregularly paid from the training fund. DGPC incurred Rs699.14 million out of training fund on account of courier service charges, court fees and TA/DA etc. Although guidelines for utilisation of training obligations didn’t contain any provision to charge such expenditure to training fund. The irregularity/lapse resulted in irregular payment of training fund of Rs699.14 million.

DGPC replied that payment out of training fund on account of arbitration fee and count fee was made with the approval of competent authority and the matter has been taken with the Ministry of Finance. It was also replied that the payment of TA/DA had been permitted in training guidelines and payment to the courier service charges had been paid out of training fund as per the directions of Principal Accounting Officer. However rejecting the contention of the DGPC, the audit said that no such provisions existed in policies, rules or guidelines.

Similarly DGPC also failed in utilisation of Rs1477 million of social welfare fund in the lease areas of oil and gas exploration. The Irregular appointment of legal advisor and financial consultant was also highlighted by the audit. The DGPC appointed two ex-government officers as consultants on contract basis who were remunerated from training fund. Proir of the prime minister, as required for re-employment of government servants, was not obtained, the audit reported pointed out. The irregularity/lapse resulted in irregular payment of Rs12.61 million.

Moreover, in 2011, Ministry of Petroleum and Natural Resources directed DGPC to relieve all re-employed ex-government servants but DGPC didn’t obey the orders. The DGPC insisted that the hiring, of ex-government servants, as consultants doesn’t require the prime minister’s approval.

Similarly Departmental Audit Committee (DAC) also directed DGPC to conduct inquiry in respect of financial consultant and to refer the matter to competent authority in respect of the appointment of legal adviser. However no progress was intimated till the finalisation of this report. DGPC extended Sui Mining lease holding by Pakistan Petroleum Limited for further one year without concurrence of provincial government. Audit observed that the action was contrary to public interest in so far as it was done to give undue benefit to PPL. Moreover, after the promulgation of 18th amendment it was obligatory to engage the provincial government before taking any decision in this matter.