ISLAMABAD, Dec 14: The government has decided to hold a pre-bid conference next month to privatize the Pakistan Petroleum Limited (PPL) preferably, during the first quarter of 2006.

Official sources told Dawn here on Wednesday that due diligence of six pre-qualified parties, including M/s MOL petroleum company of Hungary, has been completed. And, now the officials of the Privatization Commission (PC) are examining the documents of the six parties, one of which, will, eventually, sign a share purchase agreement with the government.

“All the likely issues, relating to the PPL transaction, are being sorted out urgently before the pre-bid conference with a view to finalize the deal as quickly as possible”, said a source. He, however, declined to give the names of other five parties pre- qualified for the sale of PPL. But another source said that MOL, OMV of Austria and British Gas were the serious contenders among the six pre- qualified parties.

Sources said the privatization of PPL was accelerated after Chairman of MOL company, Zsolt Hernadi visited Pakistan and met President Gen Pervez Musharraf and Prime Minister Shaukat Aziz on Sept 27, and showed serious interest to take part in the privatization of the organization. He said that his company was also interested in a number of other potential acquisitions of public sector entities in Pakistan.

The PPL, whose privatization was once considered through, Global Depository Receipts, is one of the pioneer exploration and production (E&P) companies in Pakistan oil and gas sector. The PC is proceeding with a strategic sale of 51 per cent shareholdings in PPL along with transfer of management control.

The sources said that the financial advisor of the PPL — Merrill Lynch International and KASB Securities (Pvt) Ltd — have been directed to expedite the strategic sale. In July 2004, the GoP concluded an offer for sale and initial public offering (IPO) of PPL on the domestic stock exchanges.

MOL, as a major operator in ‘TAL” block, has two major hydrocarbon discoveries to its credit.

The PC had invited Expressions of Interest (EOIs) from interested parties on February 17, 2005 for the disinvestment of PPL. The parties submitting EOIs were asked to submit Statements of Qualifications (SoQs) by April 30, 2005, whereby eleven parties submitted SoQs to the Privatization Commission. Six parties were finally pre-qualified.

In July 2004, the government concluded a 15pc offer for sale and IPO of the company on the domestic stock exchanges at Rs55 per share. The basic issue was for 10 per cent shares with a green-shoe option of another 5pc and the entire issue was 3.7 times oversubscribed. The current shareholders of PPL are GoP (78.35pc), IFC (6.09pc,) and institutional and individual investors (15.56pc).

The company holds operator ship of major oil and gas fields, including Sui, Kandhkot, Adhi and Mazarani, while its non- operated portfolio includes interests in Qadirpur, Miano, Sawan and Tal fields. The Company’s exploration portfolio includes operated and non-operated joint ventures in 10 onshore blocks and 2 offshore blocks.

PPL holds joint ownership with the government of Balochistan in Bolan Mining Enterprises, which is involved in the business of mining exploratory well-drilling. BME is the operator of the Gunga Barytes mines in the province. Share of profit in BME on June 30, 2005 was Rs29.263 million.

The proven plus probable remaining recoverable reserves (2P) of PPL operated and non-operated interests, as of June 30, 2005, were 6.9 trillion cubic feet of gas and 39.6 million standard barrels of oil/NGL.