Transparency International’s 2009 report shows Pakistan moving from the 47th to become the 42nd most corrupt country in the world. With Rs.300 billion worth corruption cases identified by the TIP alone in various federal government departments in one year, chances of the country ever ridding itself of corruption seem bleak.
Pakistan’s largest exploration and production sector is no exception to the current state of affairs. The Oil and Gas Development Company Limited (OGDCL) is barely holding up—having to deal with the consequences of poor human resource management, reckless recruitment and financial irregularities on a daily basis. Corruption and a lack of accountability are at the heart of such anomalies that continue to disintegrate the system that helps hold this organization together. The organizational culture, thus, stands in the way of bridging the deficit between the national demand and supply for both oil and gas.
Despite investing 13 billion in search for oil and gas last year, OGDCL failed to find any reserves. Moreover, in two years OGDCL spent Rs. 22 billion searching for oil and gas, again to no avail. Currently, only about 27 trillion cubic feet of reserves exist which will only meet the demand for the next 16 to 17 years according to estimates. After that how the government expects Pakistan to fulfill energy needs is a mystery! The OGDCL’s performance has been so disappointing that it has not been able to extract oil or gas from even one of the 13 wells dug up for the purpose. The success rate remains dismal: of 100 wells dug up now, only 35% can be expected to be utilized for oil and gas. Projects taken up by the OGDCL suffer from problems like delay in installation, erection, start up and commissioning. In order to keep grievances at bay, OGDCL is now taking credit for old projects in an attempt to distract the public from present-day failures. Credit for the gas discovered at Dera Bugti was taken up by the OGDCL recently even though gas reserves were found in the area in 2011 and 2012. Back then, a law and order situation, kept the organization from bringing the discovery into limelight.
The OGDCL earns more than Rs. 50 billion yearly for Pakistan. However, despite the heavy funding, corruption leaves no option for the organization but to compromise on the international standards set for exploration and production. The number of political appointments of officials and fake degree holders (210 officials, 1800 staff members) within the system has damaged the OGDCL’s image significantly. Moreover, a lack of technically qualified personnel has been one of the chief reasons aggravating conditions within the already disintegrating system. Absence of succession and business plans leaves employees with a low morale and motivation level and provides room to engage in malpractices.
It is unfortunate that in over two decades, no drilling rigs have been purchased by the company. The last drilling rig was purchased in 1985 and ever since then OGDCL has had the ownership of only 5 rigs. The remaining demand is fulfilled by rigs rented from private companies at about $32000 per day. It is distressing that the company chooses to rent drilling equipment when it can be instead bought for nearly $15 million. The only explanation for officials choosing to rent drilling equipment instead of purchasing is the high prospects of corruption without detection and the commission that can be extracted from the extensive process of renting. Hence, the benefit of such heavy spending lands in the pockets of a few officials while the masses suffer in silence.
Meanwhile, the government seems unwilling to entertain any cases of corruption in the OGDCL. According to TIP representative, Adil Gilani only the Supreme Court of Pakistan, the Public Accounts Committee of the National Assembly and the PPRA took notice of some of the corruption cases brought forward. He identified lack of an effective accountability apparatus as one of the key reasons for corruption on the rise adding that despite TIP forwarding a number of corruption cases to the NAB, no action was taken on the account.
As the government continues to turn a blind eye towards problems within the system, organizations like the OGDCL continue to rapidly and inevitably head towards their own destruction. What is frustrating is that these organizations can be saved; more energy can be brought to an energy-starved nation. The government, unfortunately, is visibly unconcerned and recklessly setting out for ‘more important missions’ thus allowing the few corrupt beneficiaries in these organizations to sit in their seats comfortably and watch as the country runs out of the very fuel that keeps it going.
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