Someone must have been telling lies about Joseph K., for without having done anything wrong he was arrested one fine morning.” Thus begins Franz Kafka’s novel The Trial, one of the most important works of European literature. There are days when the Byco management and shareholders must find themselves relating well with the tribulations of the fictional Joseph K.
In recent months, Byco has found itself in the news for all the wrong reasons, and it usually stands accused of doing something that it later transpires it had never come even close to doing. Creating an artificial shortage in the Pakistani oil market? Apparently Byco has the power to do that. Violating international sanctions? Accuse Byco. Defrauding state-owned oil companies? Sure, why not? Throw that accusation onto the pile too.
Some of the accusations are just utterly ridiculous, like the one about Byco being responsible for causing the oil shortages in Pakistan in 2020. Byco simply does not have the kind of market share to be able to do that, and data presented in the government’s own inquiries found that Byco’s storage capacity was in fact responsible for helping ameliorate the crisis rather than exacerbating it. Strangely, the government seemed unwilling to state that fact, even though its own numbers said as much.
And other accusations are really because officials at the National Accountability Bureau (NAB) do not seem to understand the concept of receivables and payables on a company’s balance sheet.
This story is not about those accusations or a debunking of them. The above paragraphs are sufficient to address the seriousness of the charges in question. Instead, this story is about why those accusations have been made in the first place, who has the most incentive to make those accusations and why, and what their existence says about the state of play in Pakistan’s energy sector.
It is an examination of a company that is emblematic of Pakistan’s private sector oil and gas companies: trying to serve the country’s energy needs while competing against some of the biggest oil and gas giants in the world, and hamstrung by a regulatory environment that places them in a bad halfway house between market-based pricing and government-controlled pricing.