ISLAMABAD  -  Prime Minister’s Office has sought a detailed report from Petroleum Division regarding alleged violation of Petroleum Rules by Frontier Holdings Limited (FHL) and SPUD Energy PTY Limited.

According to documents, PM Office in a letter dated May 05, 2025 carrying subject “Urgent Action Required Violation of Petroleum Rules by Frontier Holdings Limited (FHL) and SPUD Energy PTY Limited” asked the Petroleum Division to furnish a detailed report. And, following the PM Office took notice of the alleged violation of the Pakistan Petroleum Rules, 2001, in the disposition of controlling shares of two petroleum exploration firms—SPUD Energy Pty Ltd and Frontier Holdings Limited (FHL), the Director General Petroleum Concession swung into action and advised the Chief Executive Officer of FHL to submit a report in the matter to proceed further in accordance with applicable rules.

Earlier, Transparency International Pakistan (TIP) requested the Prime Minister’s Office to initiate an investigation into the alleged violation of the Pakistan Petroleum Rules, 2001, in the disposition of controlling shares of two petroleum exploration firms—SPUD Energy Pty Ltd and Frontier Holdings Limited (FHL).

In a formal letter dated May 2, 2025, TIP raised concerns over the alleged transfer of controlling shares in the two companies without prior government approval, a move that, if confirmed, would violate Rule 69(d) of the Pakistan Petroleum (Exploration and Production) Rules, 2001.

According to Rule 69(d), companies must obtain prior consent from the government before proceeding with any disposition of controlling interests. The rule states: “Without the prior consent of the government, there shall be no disposition of the share capital of the holder or its parent company in consequence of which any person who, prior to that disposition, had effective control of the holder or its parent company ceases to have such effective control.”

TIP stated that SPUD and FHL are linked to Jura Energy Corporation, which recently saw a controlling interest shift from Phoenix Holdings Ltd to IDL Investments Ltd. It alleged that this transaction occurred secretly, without notifying or securing consent from the Petroleum Division.

The watchdog also cited past regulatory violations by SPUD and FHL, including a government-ordered recovery of Rs1.3 billion in unpaid royalties. TIP warned that failure to act on this latest development could set a dangerous precedent, undermine regulatory authority, and compromise Pakistan’s energy sovereignty.

Reportedly in 2023, Prime Minister Shehbaz Sharif directed the petroleum division to recover an outstanding royalty amount of Rs1.13 billion from two oil and gas firms, Spud Energy and Frontier Holdings Limited (FHL).

The PM’s office, in a letter dated January 20, 2023, to the secretary petroleum division, said that “it has been desired that the petroleum division shall ensure recovery of the outstanding amount within two weeks and submit a compliance report.” In the letter which was addressed to the managing director, Sui Southern Gas Company Limited (SSGC), Fazal Abbas, the petroleum division’s financial analyst, advised the company to stop the payments of Spud Energy and FHL. He said the outstanding royalty should be deposited in the government treasury.

The royalty at a rate of 12.5% has accrued on the sale of natural gas and crude oil from Reti Maru, Badin IV South Block, and Zarghun field. The government has taken action and sought recovery and submission of a compliance report from the petroleum division.