SSGCL asked to recover pending dues of Rs1.4bn from oil companies
2023-02-04
ISLAMABAD: The Ministry of Energy has asked the Sui Southern Gas Company (SSGCL) to recover more than Rs1.4 billion from two oil companies that had failed to pay royalties and other dues.
This direction was issued by the ministry after it received orders to do so from the Prime Minister`s Secretariat.
The amount should be recovered from two companies Spud Energy and Frontier Holdings Limited within two weeks and a compliance report must be sub-mitted, the directive stated.
The Petroleum Division has also asked the SSGCL to stop making payments to these two companies for gas purchased from Zargun South, Guddu and Badin (IV) wells and deposit the amount in the government treasury.
It has been highlighted by the division that the pending royalty amount had reached (by December 2022) Rs1.1 billion for Spud Energy and Rs297.8 million for Frontier Holding Limited.
Several notices have been for-warded by the division to the two companies and buyers of oil and gas from these companies including SSGCL and others have been asked to withhold payments.
According to details, the amount owed by Spud Energy and Frontier Holdings could be higher than Rs1.4 billion as these companies have not been paying their dues at several exploration blocks.
`As long as all royalty dues are not cleared by these two firms, they will not be allowed to take part in the bidding process at anyexploration block, in the future, an official from the division said.
Spud Energy was awarded licence to undertake petroleum exploration activities at Guddu and Bolan blocks, while Frontier Holding had Badin IV South Block, under the Pakistan Petroleum (Exploration and Production) Rules, 1986.
After commercial discovery at these blocks, SSGCL was the buyer of natural gas and crude oil as well as condensate from Bolan Block and Badin IV South Block.
