The National Assembly Standing Committee on Petroleum and Natural Resources has barred Sui Southern Gas Company (SSGC) to renew Gas Sale Agreement (GSA) with British Petroleum (BP), and recommended to strike a fresh deal with United Energy Group (UEG), which is going to replace BP on Badin field.
The NA body on Petroleum, which met with Waqqas Akram in the chair on Wednesday, had directed the Ministry of Petroleum, the Oil and Gas Regulatory Authority (Ogra), the Competition Commission of Pakistan (CCP), and PPRA to submit legal opinion on automatic extension of GSA with BP which has sold its shares to UEG for $775 million.
Waqqas said that GSA between SSGC and BP was also to be renewed on February 3, 2011. But now BP has sold its shares to new investor and process of handing over assets is underway. The meeting was informed that the new company had completed due diligence. "Why should SSGC ask new company replacing BP to ink a fresh deal," Waqqas said, adding that agreement between JJVL and SSGC has been linked with automatic extension in GSA between SSGC and BP.
"GSA between SSGC and BP should not be extended, automatically, as new agreement should be signed after BP sells its shares to new company," he said. Secretary Petroleum Imtiaz Qazi said that it had been a normal practice to transfer shares of one company to the other and Petroleum Concession (PC) Agreement also allowed it to the exploration companies.
"Agreements are inherited to the companies which get the shares," Qazi said, adding that UEG had not applied to seek No Objection Certificate (NoC) after BP sells its share to it. Chairman Committee Sheikh Waqqas said that "we understand that GSA between SSGC and BP should not be renewed and we are sending case to Transparency International Pakistan (TIP) to seek their legal opinion from experts". He directed Ministry of Petroleum, Ogra, PPRA and CCP to submit legal opinion regarding renewal of agreement between SSGC and BP within ten days.