Peshawar High Court orders FIA probe into Karak crude oil ‘theft’

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PESHAWAR: The Peshawar High Court on Tuesday directed the Federal Investigation Agency (FIA) to conduct an inquiry within three months into the alleged theft of crude oil during production by oil fields in Karak district.

A bench consisting of Justice Roohul Amin Khan and Justice Syed Arshad Ali also directed federal petroleum and natural resources secretary Mian Asad Hayauddin to cooperate with the FIA about the inquiry.

It was hearing into a joint petition of Mujahid Islam and 49 other residents of Banda Daud Shah tehsil in Karak district seeking multiple reliefs from the court, including cancellation of the licence of an international oil and gas exploration company, over the alleged crude oil theft.

The petitioners requested the court to declare that the people of Karak, Kohat and Hangu, whose properties and lands suffered damage and who faced health hazards and environmental degradation due to oil exploration, are entitled to compensation by the provincial and federal governments.

Asks petroleum secy to cooperate with investigators

They also sought pronouncement that the FIA, law-enforcement agencies, federal and provincial revenue authorities, Oil and Gas Regulatory Authority, OGDCL, and federal and provincial anti-corruption bodies are involved in the oil and gas theft and other issues as they safeguard the interests of the exploration company.

FIA additional director Sajjad Khan also appeared before the court along with deputy attorney general Asghar Khan Kundi and said the investigation agency lacked technical support for probing the matter but the petroleum division didn’t cooperate in that respect.

Petroleum secretary Mian Asad Hayauddin showed up on the court’s notice and said his ministry would fully support and cooperate with the FIA as directed by the court.

He said the ministry would offer all technical assistance required by the agency.

The bench later adjourned hearing into the petition until the last week of May asking the FIA to produce its report on the matter by then.

Counsel for the petitioners Fazal Shah Mohmand said the MOL Pakistan Oil and Gas Company, a subsidiary of the MOL Plc, had started operations in Pakistan after it was awarded an exploration licence and a petroleum concession agreement was made in Feb 1999.

He alleged that the company claimed to be producing 8,000 barrels per day (BPD) of oil in the licensed area, whereas an inquiry earlier conducted by the FIA, Khyber Pakhtunkhwa, had found huge discrepancies and corrupt practices in the company’s operation as the production stood above 30,000 BPD.

The lawyer claimed that the matter was also taken up by the National Assembly standing committee on petroleum few years ago but it was put in cold storage due to the pressure of the influential elements involved in it.

He also said all chemicals extracted from wells were dumped so carelessly that they spread around the whole exploration sites attached with Gurguri.

The lawyer said the chemicals were poisonous and polluted water adversely affecting the health of residents and wildlife.

The MOL Pakistan also submitted its reply to the petition denying all allegations against it and insisted that it had fulfilled all its social welfare obligations.

It added that the matter had been investigated multiple times and it (MOL Pakistan) was in fact a victim of the crude oil theft.

The company claimed that it had been cleared by the Public Accounts Committee and few investigations in the past on the matter.

It said recently, it together with its joint venture partners of the TAL Block agreed to support the repair and rehabilitation of the 40km Gurguri-Banda Daud Shah Road connecting the districts of Karak and Hangu at the cost of Rs400 million.

The company insisted that since 1999, its joint venture had paid back to the government and communities a sum of Rs91 billion in the shape of royalties (Rs88 billion), Rs960 million production bonuses and infrastructure development and social welfare initiatives.