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January 28, 2020

Govt likely to offer OGDC stake to Malaysia

Business

January 28, 2020

ISLAMABAD: Pakistan is likely to offer Malaysia a possible seven percent stake in Oil and Gas Development Company Ltd (OGDCL), as the two countries will focus on boosting trade links during Prime Minister Imran Khan's scheduled visit to the south east Asian country next week, official sources said on Monday.

The government has also invited Malaysian energy firms to bid for oil and gas exploration blocks in Pakistan to inject fresh investment as well as technology in this sector, petroleum ministry said in a separate statement.

An official on the condition of anonymity told The News that since Malaysian government had strongly supported Pakistan on diplomatic front on various issues, and Pakistan also wanted business, so it should do it.

“The same offer has been made for G2G arrangement,” the petroleum ministry official said. The petroleum division statement said Malaysian energy giant Petronas was likely to enter Pakistan to exploit this sector’s immense untapped potential.

“There is a possibility of Petronas acquiring divested shares from OGDC, PPL (Pakistan Petroleum Ltd), and Mari Petroleum that will be divested to shared partners,” said Nadeem Babar, Special Assistant to PM on Petroleum, talking with Ikram Muhammad Ibrahim, High Commissioner of Malaysia, who called on him and the energy minister.

The statement quoted the petroleum adviser as saying that Malaysian investors could also benefit in areas such as LPG (liquefied petroleum gas), refinery upgradation, etc, while Petronas could favorably look at LNG (liquefied natural gas) infrastructure development opportunities in Pakistan.

Federal Minister for Energy Omar Ayub Khan, who was leading the meeting, invited Malaysian investors to fully participate in the auction of oil and gas blocks that would be offered to foreign investors shortly with 18 initial blocks in the first phase.

Both the government officials briefed the Malaysian diplomat on the structural reforms being carried out in the energy sector of the country with special focus on the ‘ease of doing business’ in the energy sector of Pakistan, the statement said.

The high commissioner commended initiatives taken by the government of Pakistan to improve ease of doing business in the country’s energy sector and remarked, “Malaysia looked at Pakistan in general and the Pakistani energy market [in particular] as of great potential”.

The statement further said the diplomat also conveyed Malaysian Prime Minister Dr Mahatir Muhammad’s warm feelings towards the state and people of Pakistan.

While apprising the minister and adviser about the preparations being made for Prime Minister Imran Khan’s visit, he said Malaysian government was looking forward to the key visit of the Pakistani leader.

Earlier, Privatization Commission in a statement had said it was in the process of finalisation of the Financial Adviser(s) for divestment of up to seven percent shares of the OGDC.

The News when contacted Secretary Privatisation Commission Rizwan Malik, he said, “As of today we have no such intimation from the government, we are working on appointing the FA for the transaction. We will divest these seven percent shares at premium.”

“Yes the government can go for G2G mode, but it will have to reverse the process then. However, for now, other than 7 percent, the government can offer shares under G2G,” Malik added.

Since the government has 76 percent majority shares in the company, it can enter into a strategic partnership with any other government for bringing technology and investment to further boost the company and its business.