ISLAMABAD: Only three of 18 oil and gas exploration and production blocks offered by the government have been awarded to local companies, with the rest attracting no interest from local or foreign investors, officials said on Tuesday.
The two blocks were awarded to the state-run Oil and Gas Development Company Limited (OGDCL) and another to a joint venture of two local private companies.
An official, who spoke on condition of anonymity, said the poor response was a disappointment and that the government had been advised against proceeding with the auction due to unfavorable market conditions.
"We have never received such a disappointing response in the past," the official said. "Despite the advice, the government went ahead with the auction and this is what we have got."
OGDCL, a public company with decades of experience and expertise, is already burdened with numerous blocks and occupied with ongoing projects.
The joint venture that won one of the blocks consists of Prime International Oil and Gas Company Limited (PIOGCL) and Al-Haj Enterprises (Private) Limited (AEPL).
Both companies are relatively new to the petroleum exploration and production sector. Al-Haj was incorporated in 2012 as a private company under the Companies Ordinance.
It was an oil transportation company and had transported fuel to NATO forces in Afghanistan.
On the other hand, PIOGCL is a joint venture between Hub Power Services Limited (HPHL) and ENI Pakistan's Local Employees.
"Following the bidding process conducted by the committee headed by DGPC Kashif Ali on Tuesday, only these two companies, OGDCL and the joint venture of the two private companies, submitted applications. Interestingly, no company applied for the remaining 15 blocks," said an official present at the bidding process, as reported by The News.
The committee's other members included the Deputy Secretary (Development) of the Petroleum Division, the Director (Exploration) of DGPC, relevant provincial directors, and the Deputy Director (Policy) secretary of the committee.
When DGPC Kashif Ali was contacted, he said, "I cannot comment on this issue." He added, "Three blocks have been awarded, two to OGDCL and another to a joint venture."
On asking about the poor response by the investors, he said "Contact the Petroleum division for a response on it."
According to an official document obtained by this correspondent, OGDCL was awarded the Zindan-II block in Punjab and the Sehwan-III block in Sindh province.
The J/V of Prime Petroleum was awarded the S.W Miano-III block in Sindh, with Prime Petroleum acting as the operator with 55 percent shares and Al-Haj Enterprises (Pvt) Limited (AEPL) holding 45 percent shares.
Al-Haj was incorporated in 2012 as a private company under the Companies Ordinance. It was an oil transportation company and had transported fuel to NATO forces in Afghanistan.
On the other hand, Prime International Oil and Gas Company Limited (PIOGCL) is a joint venture between Hub Power Services Limited (HPHL) and ENI Pakistan's Local Employees.
It should be noted that on March 8, 2021, Eni Pakistan entered into a sale-purchase agreement with PIOGCL for the sale of the entire share capital.
Last year, the Ministry of Law deemed the Hubco undertaking, which transferred control of Eni Pakistan to PIOGCL, as inadequate for future commercial operations.
The transfer of Eni shares to PIOGCL was delayed due to concerns raised about the financial health of the new entity.
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