ISLAMABAD, May 9: The process of disinvesting the potential oil and gas sector is getting delayed due to the reservations of the ministry of petroleum and natural resources specially over the sale of mighty Oil and Gas Development Corporation Limited (OGDCL).

Informed sources said here on Thursday that the ministry of petroleum was not even approving the privatization deal of Badin- 1 oil well, although the successful bidder had increased its offer from 131 million dollars to 143 million dollars as was desired by the Privatization Commission (PC).

A number of international oil companies, already involved in upstream exploration in Pakistan, have expressed their willingness to take part in the off-loading process of government’s 30 per cent shareholding in the oil and gas sector. But they feared that the process will be delayed as the government was unclear on various issues specially over the privatization of OGDCL.

The sources said that the Ministry of Petroleum was resisting the disinvestment of 51 per cent shares of OGDCL as a single entity as was announced by Minister for Privatization Altaf M. Saleem. The ministry wanted that exploration activities should not be privatized, instead only a small chunk of the organization could be taken up for sale.

According to the first schedule, Expressions of Interest (EOIs) for OGDCL should have come by April this year but despite PC’s requests, the ministry was not giving any report over the issue which was causing delays.

The government is expecting to earn 2.5 billion dollars to 3 billion dollars mostly by selling its shares in the oil and gas sector. “From our side there is no delay, we are completely geared up for the privatization of oil and gas sector,” a source in the Privatization Commission said adding that things needed to be crystallized in the Petroleum Ministry to earn certain expected higher proceeds with a view to retiring some portion of the external debt.

The sources said that there was no possibility that Pakistan State Oil (PSO), Pakistan Petroleum Limited (PPL), Pakistan Oilfields Limited (POL) and government’s shareholding in the remaining 9 oil and gas wells could be privatized on schedule.

“The whole scenario is confusing the investors,” said another source. He said that now when the foreign investors were already disturbed due to the fresh wave of violence and fast declining law and order situation, delay in finalizing various deals including that of OGDCL will send further negative signals.

The Financial Adviser of OGDCL Merrill Lynch has given a number of briefings to the officials of the Ministry of Petroleum to clear the OGDCL deal for privatization. However, the sources said, nothing has been decided by the ministry so far.

“We are committed to complete deregulation of the state sector as was desired by the President Gen. Pervez Musharraf himself,” a source said regretting that things were not shaping up to disinvest the oil and gas sector due to one reason or the other.

But various other planned privatization deals, he pointed out, were coming up on schedule, which include Pakistan Telecommunication Company Limited (PTCL), United Bank Limited (UBL), Pakistan Engineering Company (PECO), 12 Mutual Funds of the Investment Corporation of Pakistan (ICP), Al-Haroon Chamber building and Fletti’s Hotel, Lahore.