Published On: Sat, Mar 22nd, 2014
Published in Category: Karachi

Pakistan seeks adviser in plans to sell 5-10pc stakes in oil, gas companies

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Karachi: Pakistan is advancing plans to sell 5-10% stakes in two state-owned oil and gas companies by seeking to appoint a financial adviser to assist in the divestment, a Privatization Commission official said Friday.

The commission has been tasked with appointing a financial adviser to help it manage the sale of stakes in both Oil and Gas Development Co. and Pakistan Petroleum Ltd. and has called for bids from both domestic and foreign companies seeking the role to be submitted by April 16, the official said.

The OGDC shares will be marketed internationally in the form of global depository receipts after assessing the appetite in the domestic market, while the PPL shares will be sold domestically, the official said, with further details still to be confirmed.

The Pakistan government currently holds an 85 per cent stake in OGDC and a 78 per cent stake in PPL. PPL’s employees hold a further 7 per cent of that company.

The divestments would take around three months to complete and the proceeds were expected to be in the range of Pakistan Rupees 90-100 billion ($900 million-1 billion), said Vahaj Ahmed, research analyst at Karachi based brokerage house Topline Securities.

This is the fourth time Pakistan’s government has moved to sell equity stakes in OGDC. Around 5 per cent of shares were sold for Rupees 6.85 billion in November 2003, a 9.5 per cent stake via global depository receipts for Rupees 46.96 billion in December 2006 and 0.5 per cent shares worth Rupees 2.36 billion in April 2007. It also sold a 15 per cent share in PPL in July 2004 for Rupees 5.6 billion.

OGDC’s produced 40,215 b/d of crude oil over July-December 2013, up 2.5 per cent year on year, and 1.136 bcf/day of gas, up 5.9 per cent, latest data showed.

PPL produced 891,000 Mcf/day of gas and 12,544 b/d of crude oil in the same half-year period, down 5 per cent and up 25 per cent, respectively.
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