A subcommittee of the Senate Standing Committee on Petroleum met at the Sui Southern Gas Company (SSGC) office on Friday to examine royalty payments, production bonuses, and local employment opportunities. The committee, chaired by Jam Saifullah Dharejo, sought a 20-year breakdown of royalty payments made by oil and gas companies to provincial governments. Dharejo directed the Petroleum Ministry and the finance and energy departments of the Sindh government to provide complete records of all royalties received over the last two decades at the next meeting.
During the session, Dharejo criticized the Oil and Gas Development Company Limited (OGDCL) for only submitting aggregate royalty payments for a 10-year period. He requested that the OGDCL provide specific production figures and corresponding royalty calculations through its chief financial officer, specifically demanding data dating back to 1995, the year the company began operating in the area.
Senator Quratulain Marri raised questions regarding the OGDCL’s failure to pay production bonuses, noting the company had claimed an exemption from the requirement. An OGDCL representative informed the panel that the Directorate General of Petroleum Concessions (DGPC) exempted fields producing between 1990 and 1993. The representative stated that the exemption applied to the OGDCL's Sinjhoro Block in Sanghar, where a petroleum concession agreement was signed in 1997, and did not apply to other companies. The representative added that the company had paid bonuses on fields discovered after that period.
Dharejo sought clarification from the DGPC regarding royalty calculations, the destination of those payments, and independent audits of production figures. A DGPC representative stated that the applicable royalty rate is 12.5%, with companies depositing payments into the federal government's account. The official explained that the Finance Division deducts 2% as collection charges before transferring the remaining amount to the relevant province within 15 days based on its share. The official noted that the DGPC calculates royalties monthly and conducts audits, adding that a detailed review report containing royalty figures for the past 15 years would be submitted.
Dharejo also questioned the OGDCL's objection to production bonuses, describing them as a form of corporate social responsibility that could support public services like schools and hospitals in areas affected by exploration.
Regarding local employment, National Assembly member (MNA) Zulfiqar Sattar Bachani told the panel that United Energy Petroleum and the OGDCL are exploring for oil and gas in Tando Allah Yar, with wells located within a five-kilometre radius, but noted that no survey had been conducted. Bachani called for local residents to be given preference for lower-level jobs. Dharejo subsequently directed the Petroleum Ministry to ensure compliance with laws governing local recruitment, particularly for non-technical positions.
A ministry official stated that local people are given preference for non-technical jobs and receive training through corporate social responsibility programmes. The official noted that the OGDCL has been extending CSR funding since 2019, and that Mari Energies and other companies are also contributing to a social welfare fund.
