The News reported that Oil and Gas Development Company Limited is paying PKR 2.7 billion per annum as rent for four Chinese rigs at a time when it is under stress because of non payment of about PKR 95 billion by refineries, gas utilities and others.

OGDCL which is going to celebrate its Golden Jubilee soon has failed to develop its moveable assets such as rigs. It possesses only eight rigs and has hired four Chinese rigs and paying USD 20,000 per day for each rig, meaning that in one year it pays USD 20 million for the four rigs.

Mr Asif Sindhu acting MD of OGDCL confirmed that OGDCL is under financial constraints as its receivables due from refineries amount to a whopping PKR 95 billion. The entity is paying USD 20 million per annum as rent for four Chinese rigs.

He said that the Board of Directors recently decided to purchase two of the rigs because one rig can easily be purchased with the amount it pays as rent in one year. Germany made rigs are excellent and their price ranges from USD 23 million to USD 25 million but the price of Chinese rigs stands at USD 20 million.

Official sources said that until March 2010, OGDCL had been paying USD 50 million as rent for seven rigs. This was because of the faulty decisions of former PM MrShaukat Aziz who had ordered the OGDCL to drill 100 wells in 12 months with a view to increase the oil and gas exploration in the country. Owing to this order, OGDCL maximized the number of wells to please the then premier despite knowing that some of the wells had nothing.

He said that it would have been better had the then prime mister ordered OGDCL to increase the seismological surveys. A powerful lobby in the oil and gas sector having links with foreign companies prevented OGDCL from purchasing the rigs only to ensure their huge commissions. The official claimed that many of the formers MDs of OGDCL were also part of that powerful lobby which did not let OGDCL make strategic assets.

(Sourced from www.thenews.com.pk)