Ex GM highlights issues at Pakistan Petroleum Limited (PPL)

KARACHI: A former GM Audit at Pakistan Petroleum Limited (PPL) has highlighted issues at Pakistan Petroleum Limited (PPL) requiring urgent attention of the government.[the_ad id=”31605″]Issues:

1. Acting MD Saeedullah Shah is a former Petroleum Ministry bureaucrat with no corporate experience. Even at the ministry he is recognized as indecisive and incompetent. Since his appointment PPL has suffered a lot. Exploration and development activity is at a standstill, vital projects to deliver new gas to the system are stalled, and employees are demoralized.
2. PPL’s board has become a rubber stamp for the Petroleum Ministry. The board Chairman Salman Akhtar has no oil and gas experience and no experience in corporate governance. Further he takes instructions only from Secretary Petroleum Asad Hayauddin. No discussion or independent view is permitted on the board. Asad Hayauddin is in fact de facto Chairman of the board.
3. When any board members take an independent view based on merit, action is taken to remove them from the board. Case in point is that a director – Nadeem Qureshi – widely thought to be the most competent director – was removed from the board because he wanted decisions to be taken on merit. Specifically he is the only director who opposed the appointment of the acting MD. He is also the only director who does not take any directors fees from the company.

Background:

1. PPL had a highly competent MD – Wamiq Bokhari – from 2015 to early 2018. He did wonders at PPL. The company launched an aggressive exploration program for new gas. More wells were drilled by PPL during his 3 year tenure than in the last 60 years. New technical and management talent was brought on board. As a result of Bokhari’s work significant new discoveries have become possible. But these are now threatened due to incompetence of Saeedullah Shah.
2. Unfortunately, Bokhari fell afoul of the then Secretary Petroleum Raja Sikandar Sultan. Given Bokhari’s track record he should have been appointed for another term after his contract expired in March 2018. However, Raja Sikandar did not permit this to happen. He used his position as Secretary Petroleum to appoint Saeedullah Shah as acting MD and at the same time he appointed Salman Akhtar as Chairman, both of whom he knew would be pliant to his wishes.
3. So in one swoop the Ministry took full control of PPL with both MD and Chairman under their direct control.
4. However in order to remove any opposition on the board Raja Sikandar Sultan started the process to remove Nadeem Qureshi from the board. In the meantime PTI came to power and Raja Sikandar was replaced by Asad Hayauddin as Secretary Petroleum.
5. Asad Hayauddin has continued in the footsteps of his predecessor. He pushed, illegally to remove Nadeem Qureshi. And since the removal was illegal Nadeem Qureshi has approached the Islamabad High Court to have the removal set aside.

[the_ad id=”32940″]Recommendations for the PTI government:

It should be kept in mind that the supply of natural gas is critical to the objectives of PTI. Hence what has been wrought on PPL by Raja Sikandar Sultan and Asad Hayauddin is deeply disturbing. This is because these officials are charged with enhancing the country’s gas supply. Instead by their actions they have in fact sabotaged the efforts of a competent and well meaning team to bring urgently needed new gas to the country.

Short term measures:

1. Immediately dismiss Saeedullah Shah as acting MD of PPL.
2. Replace him with Shahbaz Khan currently GM projects at PPL. Shahbaz Khan is a highly competent oil and gas professional who was recommended by Wamiq Bokhari to be his successor. This can be verified by Wamiq Bokhari’s succession plan document which is in the possession of PPL General Manager HR.
3. Replace Salman Akhtar as Chairman with Agha Jan Akhtar, or Nadeem Qureshi. Agha Jan Akhtar is currently a director on the board. He is a former Chairman of Port Qasim Authority and has the necessary corporate skills to be an effective Chairman. Nadeem Qureshi is an engineer with degrees from MIT and Harvard Business School. He has experience in the oil and gas industry in the Middle East.

Long term measures:

1. Dismiss the present board and replace with a board of professionals from the private sector.
2. Authorize the new board to recruit a competent and experienced new permanent MD. Ensure that Wamiq Bokhari is contacted and encouraged to apply for the post.
3. Do not permit officials working at the Petroleum Ministry to be directors on the PPL board. Their presence on the board is a conflict of interest since the Ministry is also the industry regulator.