ISLAMABAD, May 4: Privatisation of country's three pioneering oil and gas companies has been put on the hold, primarily because of assertion by provinces of their rights, Dawn learnt on Friday.
Informed sources say that the government believes that no meaningful privatisation, specially of its strategic assets, was possible in the prevailing conditions and has informed various potential bidders about it.
The disinvestment of Pakistan Petroleum Limited (PPL), Sui Northern Gas Pipeline Gas Limited (SNGPL) and Sui Southern Gas Company (SSGC) was not particularly possible under the present circumstances, sources added.
"We have been officially informed through a letter last week by the ministry of privatisation and investment that there was some delay in the privatisation of PPL", said Mr Janos Feher, managing director of MOL Pakistan Oil and Gas Company.
The MOL Group of Hungary is one of the three bidders who have been short-listed for participating in the bidding of the PPL. The other two bidders are OMV of Austria and the British Gas (BG).
Mr Feher said the ministry expected that the MOL would continue to take active interest in the bidding of PPL. He, however, did not believe that privatisation of PPL had been postponed for an indefinite period.
Asked whether the government was looking for more national and international companies to take part in the privatisation of the PPL, the local MOL chief said he did not know about it.
"But I don't think inviting more companies will help especially after short-listing the three major international companies."
Responding to a question, he said the government was still finalising some issues before privatisation of the PPL.
However, sources said one of the reasons for delaying the PPL transaction was continuous demand of Balochistan government to get some share in the entity.
"Balochistan is seeking certain ownership in the PPL but if it is accepted, other three provinces, where the entity is involved in various operations, would come up with same demand," said a source familiar with the issue.
However, the minister for privatisation and investment, Zahid Hamid, when contacted said there was no delay in the privatisation of various state sector entities.
"All transactions are proceeding at a satisfactory pace", he asserted
Asked specifically about the timeframe for privatisation of PPL, SNGPL and SSGC, he said no date had so far been set but the government was very much in touch with all the three bidders of the PPL.
He said inter-ministerial meetings were taking place regularly to sort out various financial and technical issues relating to PPL transactions.
Similarly, he said various issues concerning SNGPL and SSGC were being sorted out before their privatisation.
But the minister for privatisation said all other transactions, including PSO, UBL, HBL, KAPCO, NIT etc., were progressing well, about which the government would soon be giving final dates for their biddings.
He said the government has collected a record amount of Rs78 billion during the nine months of 2006-07 while three months were still there during which more privatisation proceeds will be collected.
To a question, Mr Feher said the MOL, which is one of the top oil and gas companies in the central Europe, was also interested in acquisition of SNGPL and SSGC.
"Both these companies clearly fit in our development strategy and investment portfolio", he said, adding “there will be a major synergy effect to have more involvement in Northern Tal Block and Margalla North Block by purchasing SNGPL and SSGC.
He referred to annual general meeting (AGM) held in Budapest on April 26 in which it was decided to extensively take part in the privatisation of various state sector oil and gas enterprises of Pakistan.
"We have with us about $3.8 billion cash which can be used for acquisition of state sector oil and gas companies in Pakistan," he said.
"Our main goal is to acquire new blocks for exploration", he said.
In reply to a question, he said presently MOL Group was producing 17 million cubic feet of gas daily and 2,500 barrel of condensate oil in the Tal Block of NWFP.
"We started the process by putting up central processing facilities which is a gas plant", he said, adding by 2009, his company would add additional 200 million cubic feet of gas per day which will meet 70 per cent gas needs of Northern Pakistan. This will be met through Manzalai gas field.
And by 2013 additional 100 million cubic feet of gas per day will be further added to meet 100 per cent gas requirement of Northern Pakistan.
Mr Feher said that the MOL has so far made a total of $220 million investment through joint ventures with Oil and Gas Development Company Limited (OGDCL), Pakistan Oil Fields (POL) and other government holdings.
