Pak Court imposes $2.48m fine on China National Petroleum Corporation

A Pakistan court has imposed a fine of $2.48 million on China National Petroleum Corporation (CNPC) for a contract breach.

Islamabad Civil judge Syed Mohammad Zahid Termizi passed the order on 9 April for the firm's alleged violation of contract it signed with Petroleum Exploration (Private) Limited, a local company, reports DAWN.

According to the case details, CNPC arrived in Pakistan in early 2001 to provide drilling and rig services to local exploration and production firms.

Pakistan experienced a significant influx of international businesses throughout the first ten years of the twenty-first century and was seen as having enormous potential for exploration and production enterprises.

However, a large influx is usually accompanied by increased competition, therefore CNPC found it challenging to create and generate business with such overseas rivals.

Considering the need of time and to get the necessary head-start, CNPC entered into an agreement with the local company to help procure drilling works for CNPC against a commission for each work procured in favour of CNPC, adds the DAWN report.

From its inception to the present, CNPC has obtained drilling contracts and has been able to maintain its business in Pakistan, which now spans more than two decades.

The local company filed a court lawsuit alleging CNPC's breach of contractual obligations.

The court passed a preliminary decree of $2.48 million in favour of the local company.