Due to an acute manpower crisis, Petrobangla's development work under the Annual Development Programme (ADP) is severely suffering. Between July and April last, Petrobangla's ADP implementation rate was at a frustrating 35 percent. It was dealing with only 10 projects. In the last fiscal during the corresponding period, it attained 60 percent implementation with 19 projects.

With an annual contribution of over Tk 2700 crore to the national exchequer, Petrobangla is one of the top cash cows of the government. But the government has become indifferent to Petrobangla in the recent years due to pressure from some oil companies and the World Bank. The World Bank advises the government to dissolve Petrobangla although the move would instantly weaken monitoring of foreign oil companies.

Officials say, the country's gas sector will land in serious trouble from the next year if its manpower issues are not immediately addressed.

Petrobangla is now dealing with a number of challenges including handling the country's two troubled mines, dealing with foreign oil companies which are now supplying around 28 percent of the total requirement of gas and which are set to increase the supply to 50 percent next year, and also holding the third round of block bidding for oil and gas explorations within October next.

But lack of manpower for key positions, as well as for technical posts, has now made Petrobangla inefficient. There are about 450 people in Petrobangla now.

Out of five directors' posts, it now has only two directors. Of these two, director finance is on an extended contract which expires early this month, and director production sharing contract (PSC) is due to retire on the 30th of this month.

The posts of director operations and of mining have been vacant for a year, and the post of director planning for the last five months. Although a senior official has been put in charge of the operation directorate on temporary basis, the directors of finance and PSC look after all the five directorates.

Both of these directors are under-performers. They recently recommended that Petrobangla foregoes US $250 million audit objection against the British oil company Cairn by shelving contractual terms. As a result, other officials are raising questions about the two directors' integrity.

But instead of promoting competent and senior officials to the posts of directors, or making new appointments, the government is considering a contract for the third time with the director finance and also to keep the director operations on contract after his retirement. Petrobangla has already sent to the establishment ministry a letter seeking the third contract with the director finance.

Late last year, Petrobangla formed a committee comprising the finance and PSC directors to look into $300 million worth audit objections against Cairn for its Sangu field operation. Cairn had spent the sum without approval from Petrobangla, flouting contractual obligation. The objections were made through an audit review of Cairn's expenditure.

The committee upon reviewing the audit, came up with a report suggesting that Petrobangla may give post factum approval for expenditure of $250 million, while okaying the audit objections worth $46 million. Petrobangla then sent the report to its legal adviser for his opinion. If okayed, Bangladesh will have to pay Cairn the sum which is a result of the company's reckless and unnecessary spending.

The legal adviser was surprised to see the recommendation and said the PSC does not give Petrobangla any scope for post factum approval. Cairn spent the money without any approval from the Joint Review Committee, Joint Management Committee or Petrobangla and therefore the sum is subject to audit objections. As a result, the report has now been shelved.

"If Cairn wants to take Bangladesh to the court, fair enough," comments a Petrobangla official, "but Petrobangla can not give up its rightful claims. Directors are supposed to look after Petrobangla's interest -- not the other party's interest," he added.

"Mid-level posts are all in mess too," he pointed out. Petrobangla now has 60 percent of its posts vacant as there has been no recruitment since 1999. In absence of fresh blood in this vital organisation that has nine profit-generating affiliates, all recent promotions and postings were either union-driven or results of nepotism and bribery, allege officials.

"Many people who started off as clerks and do not have educational qualifications, have been promoted to technical posts. In Bapex, 59 men with HSC level educational background have been promoted to positions of assistant geologists, assistant geophysicists and assistant engineers," an official said.

Such inappropriate promotions coupled with lack of manpower has made Petrobangla so inefficient in recent times that it is no longer able to handle the Barapukuria coal mine and the Maddhyapara hard rock mine. The coal mine is stumbling upon a series of disasters while Petrobangla is unable to takeover the Maddhyapara hard rock project which the contractors have failed to complete even after being eight years behind the schedule.

"Some oil companies have been very unhappy about Petrobangla following the gas export controversy. They have levelled complaints at various forums that Petrobangla is their partner in the PSC but at the same time it is acting as the regulatory body thus creating a conflict of interest," said an executive of an oil company.

Against such a backdrop, the World Bank has been advocating in favour of dissolving Petrobangla.

While assisting the government in drafting the new Gas System Master Plan (GSMP) a consultant of the World Bank laid out a plan to abolish Petrobangla by 2010. "This part of the plan has been dropped ultimately, but it exposes the World Bank's attitude to Petrobangla," said an official who was involved in framing the GSMP.

According to the draft GSMP as pushed by the World Bank, the hydrocarbon unit under the energy ministry would replace Petrobangla.

"If no action is taken to properly equip Petrobangla with appropriate manpower soon enough, Bangladesh will face a disastrous situation from the next year when it will start buying a half of its total required gas from foreign oil companies," noted a senior official adding, "it's a billion dollar sector."