Around Tk197.34 crore of taxpayers’ money had been drained by Petrobangla in the 2012-13 fiscal alone, when the state-owned body reportedly violated regulations by awarding Chevron the task of installing and operating a gas compresser on the transmission line.
An audit, carried out by a four-member team of the Commercial Audit Directorate earlier this year, found that Petrobangla had violated rules by paying Chevron – an international oil company (IOC) – a gas compressor’s operational costs as cost recovery; instead of handing over the responsibility to the Gas Transmission Company Limited (GTCL) – the authority for handling the tranmission operations.
The irregularity came to the fore after the report was recently submitted to the DG of the Commercial Audit Directorate.
According to the production sharing contract (PSC), the oil companies can carry out gas production tasks, including 2D, 3D surveys, reserve assessment and drilling; but all tasks related to the transmission and distribution of gas remain excluded from the PSC. Companies under Petrobangla including the GTCL and Titas Gas are responsible for carrying out the duties of gas transmission and distribution.
In accordance with the existing regulations, the GTCL was supposed to be tasked with the installing of the gas compressor in the transmission line at Muchai in Habiganj; however, Chevron – which is allowed to only produce gas under the PSC – launched the compressor in May 2012.
Although Chevron is allowed to repair or develop production lines, there is no scope under the PSC to award the IOC with any work on the transmission line.
The audit also reviewed documents of the Energy Division along with Petrobangla’s observations on the rationality behind the installing of the compressor and found that the Prime Minister’s Office and the cabinet had approved $52.7m for the installation of the compressor at Muchai.
However, according to media reports as well as comments from several former and incumbent officials of Petrobangla, around $78m was spent on installing the gas compressor, which Chevron later collected from the state-owned oil and gas corporation as cost recovery.
The additional expenditure of $25.3m was not approved by the authorities concerned and the audit committee could not find any document on whether the Financial Management Department of Petrobangla found any irregularities regarding the extra funds during its audit of the IOC.
As a result, the government had to bear the burden of the additional $25.3m, which is equivalent to Tk197.34 crore.
Even though the compressor station became operational in April last year, Chevron was tasked with running it, instead of the responsibility being handed over to the GTCL – which already installed and is operating two similar compressors at Ashuganj and Elenga.
Several Petrobangla officials, on condition of anonymity, told the Dhaka Tribune that the process of handing over the operation duties to GTCL was being delayed as authorities claimed that the transmission company did not have enough skilled manpower.
In its recommendation, the audit committee said the government should carry out a probe to find out whether paying Chevron the $25.3m as cost recovery is due to any corruption in the system.
When asked about the irregularities, Petrobangla Director Muhammad Imaduddin said Petrobangla had followed all the regulations in installing the compressor at Muchai.
Energy Division Secretary Md Mozammel Haque Khan, however, said he was unaware of the incident as it happened before he joined office, adding that he could not comment without talking to Petrobangla authorities.
On the other hand, Sabreena Rahman, Chevron’s assistant manager of external affairs (communications-media), said: “Chevron was asked by Petrobangla to install the Muchai gas compressor and the project was implemented within the terms and conditions of the PSC that Chevron signed with the government of Bangladesh. This project is serving to increase the gas transmission capacity with respect to both throughput and pressure of the existing 24-inch northsouth and 30-inch Muchai-Ashuganj gas transmission pipeline.
“Chevron continues to operate the Muchai compressor station at the request of Petrobangla,” she added.
Sabreena also said: “Our confidentiality obligations under the production sharing contract preclude us from making the budgetary figures public.”
