ISLAMABAD: The Prime Minister’s Office has asked the Petroleum Division to submit a detailed report on alleged violations of petroleum rules by two oil and gas firms, Frontier Holdings Limited (FHL) and SPUD Energy Pty Ltd.
In a letter dated May 5, 2025, titled “Urgent Action Required: Violation of Petroleum Rules by Frontier Holdings Limited (FHL) and SPUD Energy PTY Limited”, the Prime Minister’s Office directed the Petroleum Division to investigate and report back on the matter.
The directive follows a complaint from Transparency International Pakistan (TIP), which alleged that both companies transferred controlling shares without obtaining prior approval from the government—an apparent breach of Rule 69(d) of the Pakistan Petroleum (Exploration and Production) Rules, 2001.
According to the rules, any transfer of controlling interest in a petroleum rights holder or its parent company must first be approved by the government. TIP claimed that SPUD Energy and FHL, both linked to Jura Energy Corporation, had a change in ownership from Phoenix Holdings Ltd to IDL Investments Ltd without seeking the required consent from the Petroleum Division.
In response to the allegations, the Director General Petroleum Concessions contacted FHL’s CEO and requested a formal report to proceed under applicable rules.
TIP also highlighted previous regulatory concerns involving the two firms, including a pending government-ordered recovery of Rs1.3 billion in unpaid royalties.
In 2023, Prime Minister Shehbaz Sharif had directed the Petroleum Division to recover outstanding royalties from SPUD Energy and FHL. A letter from the PM Office dated January 20, 2023, asked the division to ensure recovery within two weeks and submit a compliance report.
Following those instructions, the Petroleum Division told Sui Southern Gas Company Limited (SSGC) to halt payments to both firms until the overdue royalties were deposited in the national treasury.
The royalties, at a rate of 12.5%, are linked to the sale of natural gas and crude oil from the Reti Maru, Badin IV South Block, and Zarghun fields.
TIP warned that inaction in the latest case could weaken regulatory authority and pose risks to Pakistan’s energy security.
