PESHAWAR: During the hearing into a petition of the Khyber Pakhtunkhwa government, the Peshawar High Court on Friday issued a stay order to stop the Oil and Gas Development Company Limited (OGDCL) and Privatisation Commission (PC) from going ahead with the imminent sale of 322.4 million government shares in the company.

A bench comprising Justice Qaiser Rasheed and Justice Mussarat Hilali issued notices to OGDCL and PC directing them to file comments on the petition within a fortnight.

The bench fixed the next hearing for Oct 20 asking OGDCL not to sell any of its shares until then.

The bidding for sale of government shares in OGDCL is scheduled to take place from Oct 9 and Oct 15.


Asks oil and gas company, PC to respond to provincial govt’s petition in a fortnight


The petition was filed by the provincial government through its energy and power secretary requesting the court to declare the impugned sale of share of the OGDCL illegal, unlawful, without lawful authority and thus of no legal effect.

Shumail Ahmad Butt, lawyer for the provincial government, said the entire process of the impugned sale should be declared void ab-initio and ultra vires.

He requested the bench that to avoid further legal complication and multiplicity of litigation, the respondents should be restrained from offering for sale or otherwise transferring the shareholding of OGDCL till final disposal of the writ petition.

The respondents in the petition are OGDCL through its Managing Director/Chief Executive Officer; PC through its Chairman; Securities and Exchange Commission of Pakistan through its Chairman; Joint Registrar of Companies; and, KASB Bank Limited and KASB Securities Limited, through its chief.

Butt said the province was blessed with immense oil and natural gas and that the recent discoveries of oil and gas in the province had made it one of the richest petroleum regions in the country producing almost 50 per cent of the entire indigenous oil production and 10 per cent of the total natural gas supplies.

He said OGDCL was Pakistan’s biggest E&P Company with gross acreage of 112,794 square kilometers. He added that the company had a significant foot print and hold of oil and gas resources in the province.

Butt said recently, as per an advertisement that appeared on the official website of OGDCL, PC had undertaken to off-load through an offer for sale 322,460,900 shares out of which 96.5 per cent shares would be offered through Global Depository Shares or in form of ordinary shares to high net worth individuals only through a process of book-building, different than ordinary public offering, whereas 3.5 percent, which is equal to 11,286,100 (11.2 million) shares will be offered to employees and general public.

He said the document that was loaded on the official website, read that the bidding period would be from Oct nine and Oct 15.

The lawyer said the OGDCL had an authorised capital of Rs50 billion divided into Rs5 billion shares of Rs10 each.

He said in the company the federal government owned 74.97 percent shareholding. A total of 14.98 per cent shareholding vests in institutions, mutual funds and general public whereas another 10.05 percent shares were owned by the OGDCL Employees Empowerment Trust, a representative body of the workers.

The lawyer said after the insertion of 18th Amendment in the Constitution in 2010, a new clause (3) had been added to Article 172, which provided that mineral, oil and natural gas within the province vested jointly and equally by the province and the federal government.

He said it was both the Federation and the province that could and would take all the decisions concerning oil and gas jointly.

The lawyer said the impugned sale was also in violation of Article 154 of the Constitution as despite being a clear area within the domain of Council of Common Interest, no approval had been sought there from.

In its petition, the provincial government said despite the promulgation of 18th Amendment, there was a visible effort on part of the PC to undertake disputed privatisation endeavours of oil and gas stakes without any consultation with the provinces which was seen as a calculated attempt to dilute and damage provincial interests.

It said when the petitioner informally came to know of the proposed privatisation of OGDCL through various news items and press reports, it approached the concerned quarters including the PC in writing with a request to consult the province before such an attempt but no heed was paid to its genuine requests, as the OGDCL and PC went ahead with proposed offer for sale.

The government said OGDCL being the biggest E&P Company qualifies to be considered an asset of strategic national significance. He said OGDCL caters for 28 percent of natural gas and 62 percent of petroleum requirements of the country.

The government said the impugned sale appeared to be an effort to deprive the nation generally and the province in particular of its ownership in an asset of strategic national significance.

Published in Dawn, October 4th, 2014

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