ISLAMABAD, June 29: The Oil and Gas Development Company Limited (OGDCL) on Wednesday said it was actively considering appropriate legal action against Zaver Petroleum Company Limited (ZPCL) for providing “misleading production and reserves figures” to raise Rs250 million from the public and financial institutions.
In an official statement, the OGDCL said: “OGDCL is not a party to the financing arranged (by ZPCL) through floatation of term finance certificates (TFCs)”.
Further, the Joint Venture has already informed ZPCL that it reserves the right to adopt appropriate legal recourse in the matter. “Presently the matter is under active consideration for appropriate legal action,” the OGDCL said.
The OGDCL spokesman said the Chanda Oil and Gas Securitization Company Limited’s public subscription invited on February 15-16, 2005 has a total value of Rs250 million for which collateral was limited only to the extent of ZPCL’s future receivables. “The total value of the transaction was Rs1 billion and the issue was underwritten by financial institutions through Faysal Bank Limited and according to ZPCL, this transaction had prior clearance of the SECP,” the spokesman said.
He said the ZPCL is a joint venture partner with 10.5 per cent working interest in the Shakardara block in which OGDCL, the operator, has 72 per cent working interest and Government Holdings Limited has 17.5 per cent working interest.
He said under terms of Shakardara Petroleum Concession Agreement, each joint venture partner has a right to obtain development financing for its share of working interest and ZPCL had arranged securitization of its share of future receivables through a special purpose vehicle (SPV) i.e. “Chanda Oil and Gas Securitization Company Limited”.
The spokesman said when prospectus for TFCs was made public on February 8, 2005, “the Shakardara joint venture partners and the government taking serious note of misleading production and reserves figures advised ZPCL to issue an addendum to the prospectus in a special operating committee meeting of the joint venture held on March 17, 2005.”
“In addition, a number of other issues such as use of the name “Chanda” for securitization purposes, placing of operational risks on OGDCL, confirmation to the effect that no provision of the applicable rules and petroleum concession agreement has been violated, etc., were also supposed to be addressed by ZPCL. ZPCL has not issued any such addendum,” the spokesman added.
