ISLAMABAD: Government is mulling divestment of up to 10 percent of its stake in state-owned Oil and Gas development Company (OGDCL) and Pakistan Petroleum Limited (PPL), sources said.
The decision was taken on Thursday during a meeting presided over by Minister for Privatisation Mohammed Mian Soomro. Senior officials of OGDCL, ministries of petroleum and privatisation agreed with the divestment proposal and to forward it in the upcoming meeting of the cabinet committee on privatization (CCoP) for approval.
The sources said the government is considering stake divestment to strategic investors, especially international exploration and production companies. The government places importance to this option, which is very beneficial to increase non-tax revenue to be used for retiring the swelling national debts, they added. “Besides, divestment of shares through this mode will also bring best industry practices and knowledge, state-of-the-art E&P (exploration and production) technique in the larger interest of these companies,” an official confirmed with The News.
In August last, CCoP decided to divest up to seven percent shares of the OGDCL. Later in February this year, the committee directed stakeholders to discuss and submit recommendation on the proposed divestment of OGDCL shares after the Prime Minister Imran Khan stressed privatisation process to accelerate. Sources said the privatisation meeting also discussed the issue of de-capping of dividends of state-owned Mari Petroleum Company limited (MPCL) to execute its stake divestment. The Economic Coordination Committee of the cabinet capped MPCL dividends and therefore its de-capping is required.
“The privatisation commission and petroleum division agreed to take this issue to the ECC,” the official said.
Meanwhile, the minister for privatisation held a meeting with the representatives of the International Finance Corporation (IFC) and discussed with them the privatisation of two re-gasified liquefied natural gas- (RLNG) based power plants and circular debt menace.
Soomro said the efforts of IFC are commendable and “for the first time few unconventional investors showed interest in power sector”. “The issues relating to power tariff and circular debt are being discussed with the ministry of energy and a comprehensive strategy will be formulated to address the issues in the long-term,” he said in a statement.
Soomro apprised the representatives of IFC about the current status of privatisation program, which initially focuses the privatisation/divestment of PSEs, pertaining to different sectors like energy, banking, insurance, hospitality and industries. “The process of the entities included in active program and other land/assets is at an advanced stage and is likely to fetch Rs150 billion during the current fiscal year.”
