This is a case study on how to destroy a company. The company in question is Pakistan Petroleum Limited, one of Pakistan’s premier oil and gas exploration companies.
In September 2014 a new board was appointed at PPL. It was a board of professionals. The Chairman was Waqar A Malik from the private sector. In addition to the professionals there were two people from the Ministry of Petroleum – Arshad Mirza the then Secretary Petroleum, and Saeedullah Shah who at that time was a senior Petroleum Ministry official.
One of the first tasks the board had was to appoint a new MD. A transparent recruitment process consistent with all statutory requirements led to the appointment of Syed Wamiq Bokhari as the new MD. Bokhari, a petroleum engineer, brought with him a wealth of international operating experience. He was also the first outsider to head PPL.
A bit of history before the story continues: PPL emerged out of what was known as the Burmah Oil Company (BOC). It was registered in Karachi in the early 1950’s by its British owners as a private company. In 1952 PPL discovered the Sui gas field. This was a stupendous discovery. Sui’s estimated reserves of gas were 13 trillion cubic feet. It was expected at the time that this would be enough keep Pakistan self sufficient in natural gas for the next 60 years.
As the years went by PPL developed a reputation as a highly professional and well-managed company. It was the employer of choice for many newly minted engineers and other professionals. In 1997 The British owners of PPL decided to divest their shares in the company. The Government of Pakistan (GOP) acquired the BOC stake becoming in the process the owner of the majority of shares – some 70%.
The change of ownership initially had little impact on PPL. The GOP or the Petroleum Ministry did not interfere in company affairs. The company board was independent and responsible for oversight. The solid management principles, practices and policies that BOC had developed ensured that management remained professional and competent.
The first signs of trouble started when the PPP government started to politicize the board in July 2010. For the first time a PPP politician, Hidayatullah Pirzada, with zero business or oil and gas experience was appointed as board Chairman. It was during the tenure of this board that the first case of mega corruption emerged. An acquisition was made by PPL for the Pakistan assets of a Czech oil company called MND for $180 million. Subsequent investigation revealed that PPL had overpaid approximately $100 million for this acquisition. The case has been referred to NAB.
Now back to 2014. The new board brought in significant improvements in the governance of the company. Credit for this goes mainly to Waqar Malik who brought his experience from top companies in the private sector and applied it to PPL. At the same time Wamiq Bokhari, with the support of the board, implemented important organizational changes, introduced cost cutting measures, and most important of all, instilled a new culture of urgency in the company.
Urgency was needed because, paradoxically its success in finding the great Sui field, and the steady stream of profits from it, led to a sense of complacency at PPL. The company thought that Sui would last forever and took its eye off the real business of oil and gas companies which is to always explore for new oil and gas fields. This can only happen through a continuing process of drilling for new prospects. Yet, amazingly, in most years PPL was drilling only 2 or 3 wells per year.
As an outsider, with international experience, Wamiq Bokhari immediately realized the problem. During his three-year tenure, PPL drilled some 70 wells at an average of 23 wells per year. This was an astonishing ramp up from the 2 or 3 or wells per year average drilled in the previous 70-year history of the company.
Exploration work expanded many fold. Twelve new significant discoveries were made as a result of the increased drilling. This is the most ever in PPL’s history. Many interesting prospects were identified. The company seemed on the path to making Pakistan self-sufficient in oil and gas.
But things started to go awry when, for personal reasons, Waqar Malik resigned as Chairman of the board in August 2016. His going started the slow downfall of PPL. At that time control of the board fell into the hands of Arshad Mirza the then Secretary Petroleum. For a full 9 months after Waqar Malik’s departure, Mirza failed to appoint a new Chairman. This left the board headless and directionless. It also frustrated the efforts of Wamiq Bokhari who had laid out detailed plans for future development. These could not be approved because the board was headless. The urgency of having a Chairman was lost on Arshad Mirza.
Finally, in April 2017 a Chairman was appointed. This was a chartered accountant named Dr. Ibne Hassan, who seemed more interested in pleasing his clueless masters at the Petroleum Ministry rather than working to push Wamiq Bokhari’s bold initiatives. Dr. Ibne Hassan also, for some reason, attempted to suppress the independent inquiry report on the MND corruption case.
But some directors persisted, and it was finally, belatedly and reluctantly, submitted to NAB. In the end Ibne Hassan’s appointment made no difference. The early paralysis continued with the board dithering and delaying important decisions, attempting to actively obstruct Bokhari’s efforts, and trying to undermine earlier progress.
So far, all the problems at PPL could be attributed to a general level of incompetence at the board level and disinterest at the ministry. All this changed when a man named Sikandar Sultan Raja was appointed Secretary Petroleum in December 2017. Sikandar, a medical doctor by training, knew little about how large companies run, and less about the oil and gas industry, suddenly found himself in control of one of Pakistan’s most prominent oil and gas companies.
What followed can only be described as an unmitigated disaster. It as if Sikandar wanted to destroy PPL. It is a sordid story. It started by him taking a serious personal dislike to Wamiq Bokhari – the main architect of PPL’s revival. All of Bokhari’s plans requiring board approval were rejected or delayed on flimsy grounds.
Bokhari was harassed in other ways. On several occasions he was kept waiting outside Sikandar’s office at the ministry for many hours. Curiously, Sikandar had a red light installed on his office door. When the light was on, no one was allowed to enter or to disturb him. So, when Bokhari asked Sikandar’s secretary to tell him on the intercom that he had an appointment he was told: “Sorry sir, we are not allowed to disturb him when the light is on!” Several hours passed by. The light stayed red. Bokhari left without meeting Sikandar. No professional worth his salt should have to tolerate this kind of conduct, especially from a public servant.
When Wamiq Bokhari’s contract ended in March 2018, many on the board were keen to renew it because they had seen the progress that he had made. But Sikandar, due to his personal dislike of Wamiq Bokhari, was not all keen to do so. He hemmed and hawed, delayed and obstructed, until a frustrated Bokhari finally left PPL.
As if this was not enough, worse was to come.