The Oil and Gas Development Company Limited (OGDC) board of directors' meeting took stock of Petrosin Corporation (Pvt) Limited wrongdoings, and majority of the participants opposed out of court settlement of disputes with it.
Sources said that the meeting turned sour when a good majority of participants strongly opposed settlement of disputes between the OGDC and Petrosin Corporation (Pvt) Limited.
They were of the view that Petrosin Corporation (Pvt) Limited caused irreparable loss to OGDC both in terms of finances and reputation by supplying materials below specifications for its exploratory wells.
Some of the directors were of the view that Petrosin had fraudulently charged excessive amount of money for the plants supplied to the company. They opined that in addition to employees of OGDC, who are already being investigated by NAB on charges of corruption, Petrosin was equally responsible for the fraud.
They said that Petrosin should be blacklisted for future business.
NAB is investigating a reference against OGDC for wrongdoings at Uch gas field and its half a dozen top level officers are either behind the bars or waiting for final verdict on bail. Petrosin being party to the case is also included in the reference.
Those who held Petrosin Corporation (Pvt) Limited responsible for wrongdoings referred to ENAR Petrotech investigation report in support of their point of view. ENAR report had confirmed that Petrosin Corporation (Pvt) Limited supplied loose and unskidded LPG plants for three OGDC fields.
According to details made available to this correspondent, the OGDC had entered into contracts with Petrosin Corporation (Pvt) Limited (Petrosin) for supply/ construction / installation and commissioning of three LPG plants at Fimkassar, Kunnar and Garhi Hassu. Another contract was for supply/ construction / installation and commissioning of gas dehydration plant at Uch gas field.
Sources said that OGDC hired services of ENAR Petrotech to inspect / verify the equipment (LPG plants) supplied by Petrosin. It confirmed that the LPG plants had large number of deficiencies. For this Petrosin payment was withheld and bank guarantees expired.
The dehydration plant was installed by Petrosin at Uch. However, due to urgency of the supply of gas to Uch Power Limited, OGDC took over the plant operations without its performance test. This gave rise to the disputes between the two parties and four cases were pending in Civil Court, Islamabad.
The meeting was told that to avoid lengthy litigation, the board was requested to authorise negotiations with Petrosin for out of court resolution of the disputes. The request was approved.
Sources said that after exhaustive negotiations, OGDC released 80 percent of Petrosin's retention money in exchange for supply of remaining materials.
It was finally submitted that considering the fact that the disputes were pending in the court of law for the last eight years and even preliminary work had not yet been completed, out of court settlement would be in the best interest of all concerned.
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