ISLAMABAD:Federal Minister for Petroleum Ali Pervaiz Malik told the National Assembly on Tuesday that three previous boards and managements of Pakistan Petroleum Limited (PPL) had endorsed the decision to shift the company’s headquarters from Karachi to Islamabad.
Responding to a calling attention notice about the proposed relocation, the minister said the move could raise concerns about operational efficiency, public expenditure and Karachi’s strategic importance in the national economy.
However, he said the decision was not politically motivated and was based on the company’s requirements and the condition of its existing building.
He said the concerns raised by members of the National Assembly would be addressed by providing them with the relevant record so they could examine the reasons behind the decision.
The minister said several oil and gas exploration and production companies, including Mari Petroleum, Oil and Gas Development Company Limited (OGDCL) and private-sector firms, maintained operational offices close to their field operations.
He said their commercial and administrative offices could be located in different cities while field activities continued in their respective areas.
He assured the House that PPL’s operational offices and field activities would continue and that the company would retain its satellite office in Karachi.
The minister said the company’s operational assets would continue to function as before and there was no intention to reduce Karachi’s importance through the relocation.
Ali Pervaiz Malik said the decision should not be viewed as a matter of personal preference, as boards and managements in three previous periods had endorsed it.
He stressed the need to examine the reports and documents that formed the basis of the decision. He also said the relevant report would be submitted to the office of the concerned National Assembly member for review.
He added that most of PPL’s operational assets were located in Balochistan, while the company also had significant activities in Sindh. Steps were being taken to improve its administrative structure and ensure effective governance, he said.
Responding to a question by Nafisa Shah, the petroleum minister referred to a decline in PPL’s gas production. He said the company had been producing around 1,000 million cubic feet per day (MMCFD) in 2017, but production later fell to approximately 600 MMCFD.
He said the decline in production and the company’s financial performance needed to be assessed separately. His reference to lower production was not intended to suggest that the company was suffering financial losses, but to highlight the change in its production levels, he added.
The minister invited lawmakers to examine year-wise figures for circular debt to determine whether there had been any significant increase over the past 18 months to two years.
He said state-owned enterprises should be allowed to operate under the governance framework prescribed by the State-Owned Enterprises Act.
Improving operational efficiency and administrative management should remain the focus, rather than concentrating on how many employees were being transferred from one city to another, he added.
Responding to question, he reiterated that the report underlying the headquarters relocation decision would be submitted to the concerned member’s office for examination.
He said decisions endorsed by three previous boards and managements should be assessed in light of the relevant record.
The minister clarified that he had not claimed PPL was operating at a financial loss. Rather, he had referred to the decline in its gas production, he said.