DG Audit takes notice of land lease agreement with Shazain Bugti, brothers

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ISLAMABAD: The Auditor General of Pakistan has taken notice of alleged land lease agreement of Oil and Gas Development Company Limited (OGDCL) with Shazain Bugti and sought response from the OGDCL managing director on eight questions, besides provision of some relevant documents.

According to sources, the Directorate General of Audit (Petroleum & Natural Resources) has taken notice of OGDCL’s land lease agreement for the land of Uch gas fields with Shazain Bugti, leader of Jamhori Watan Party (JWP), and his brother, and the matter related to the payment of Rs770 million to Bugti brothers. 

They alleged OGDCL MD has put approximately Rs8 billion worth burden on national exchequer due to this land lease agreement, which was allegedly chalked out without getting prior permission of OGDCL board. OGDCL issued three cheques of Rs770 million to Shazain Bugti, Guhram Bugti and Mir Chakar Bugti on 1st July, 2020, said sources.

“Approximately Rs8 billion worth heavy burden was put on the national exchequer as OGDCL issued three cheques worth Rs77.2 million to Shazain Bugti and his two brothers even before inking of the amended agreement,” a source privy to this development said.

The DG Audit has asked OGDCL MD to provide details of the total land acquired for Uch gas field up to June 2020, copy of lease agreements for the hiring of land for Uch gas filed, the survey of de-report by the OGDCL Land Assessment Committee for the requirement of land for Uch gas filed, copy of lease agreement for 2930 acres of land signed on January 14, 2016, copy of de-hiring notices for 2930 acres issued on February 15, 2017, copy of lease agreement of 2500 acres of land for the period from 2017 to 2020 and copy of Board of Directors (BoDs) approval for the hiring of total leased land as well as 2500 acres of land of Uch gas field for the period from 2017 to 2020. 

Also, the MD would provide details of payment of rent for all leased land for Uch gas field with a copy of vouchers/documents, said sources.

A copy of the document available with Profit disclosed that Audit Petroleum and Natural Resources DG has further asked OGDCL MD to email all requested items in soft /scanned form for desk audit at the earliest.

Sources said that the federal government had earlier paid a hefty sum to lure its disgruntled ally Jamhoori Watan Party (JWP) ahead of the voting on the Finance Bill, 2020, and a new agreement was inked with Shazain Bugti by OGDCL wherein the company was to pay Rs79,000 per acre rent to Bugti family with effect from January 1, 2018, despite the land not being in OGDC’s use since February 2017. 

They said on the advice of the federal government, OGDC MD Shahid Saleem had approved to pay Shazain Bugti an additional 36pc as rent for 2,500 acres of oil and gas fields situated at Uch, Dera Bugti. Three cheques were issued on July 1, 2020, to the owners of the land of Uch gas field on the instructions of MD/CEO which was conveyed by GM (CSR) and SO to MD/CEO. Nawabzada Shazain Bugti was given cheque number 21506833 worth Rs257,756,931; Mir Guhram Bugti was given cheque number 21506836 worth Rs257,756, 931, and Mir Chakar Bugti was given cheque number 21506837 worth Rs257,756,931.

However, Payment to Shazain Bugti took a new turn as the OGDCL MD refused to grant approval to the issuance of cheques worth Rs770 million after which cheques which were previously issued to Bugti bounced, they added.

According to sources, OGDCL’s General Manager Finance Muhammad Azim, in a letter dated July 6, had sought the approval OGDCL MD Shahid Saleem for issuing Rs770 million to the Bugti family for land Uch gas field. However, the OGDCL MD refused to give approval in this regard.

“I did not issue any instructions to the GM (finance) for preparing cheques. I also did not issue any instruction through GM (CSR) or so for the preparation of cheques. I was informed that the GM (finance) is preparing some cheques regarding Uch land and inquired about the status of these cheques,” said sources quoting the OGDCL’s note of refusal.

They also informed this scribe that Finance and Accounts Department was advised to issue cheques in view of the urgency of the matter and it was assured that the case file along with the agreement and requisite approvals would be provided to the department. However, the requisite case file with necessary approval has not yet been provided to the department for want of which the accounting documentation still remains incomplete, they added.

The OGDCL spokesman remained unavailable for comment.

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