KARACHI: Byco Petro­leum Pakistan Limited (BPPL) was provided supplies worth over Rs1 billion free of cost without an agreement by the PPL, and the amount was showed as default in the accounts of PPL, disclosed a latest audit report.

Pakistan Petroleum Limi­ted is the second largest exploration and production company in terms of both the production and reserves. Presently the PPL contributes 25 per cent of the country’s total natural gas production.

During audit of accounts of PPL for 2011-12, it was revealed that the management sold Early Well Testing (EWT) condensate products to Byco Petroleum between January 2010 and June 2011 for Rs1.181bn without signing a formal agreement.

“The payment was not received from BPPL and the amount was booked as doubtful in the accounts of PPL for 2011-12,” said the audit report.

The matter was reported to the management on Feb 1, 2013. The reply stated that the supplies were made on the directives of the ministry.

The reply was not tenable as supplies were made without a legally binding contract, said the report.

As per the report, sales revenue of the company increased to Rs102.7bn in 2012-13 compared to Rs96.2bn in the previous year.

The report said the revenue increased due to higher oil prices in the international market and depreciation of rupee against US dollar.

The field expenditure and royalties increased to 11.27pc in 2012-13 compared to 6.4pc in previous year which needed justification, said the report.

Production volume of natural gas decreased by 9.16pc, NGL by 20.42pc, and LPG by 17.89pc during 2012-13.

Crude oil production increased by 31pc compared to the previous year.

The sales volume of natural gas decreased by 30.7pc, crude oil by 9.2pc, NGL by 33.58pc and LPG by 38pc.

Reasons for decrease in production and sales volume need to be explained, said the report.

The report reveals that 34.9pc of the receivables of the PPL were bad debt as Rs14.196bn receivables were beyond 90 days old.

During the audit of accounts of PPL for 2011-12, it was observed that the management paid Rs45,000 per meeting to every board member up to March 2012.

The fee was enhanced to Rs85,000 per meeting from April 10, 2012, and an amount of Rs6.66 million was paid to nine board members without clearance by the financial advisor, in violations of rule, said the report.

Published in Dawn, July 1st, 2014