ISLAMABAD (October 12 2006): Privatisation Minister Zahid Hamid on Wednesday set the deadline of December 31 for Pakistan State Oil (PSO) sell-off and Oil and Gas Development Company (OGDC) global depository receipt (GDR) offering through the London Stock Exchange.

He told a press briefing that other than PSO and OGDC GDR, Pakistan Petroleum Limited (PPL), Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipeline Company (SNGPL) and National Investment Trust (NIT) management were also ready for divestment before the closing of the current calendar year.

The minister gave a detailed presentation to the mediamen on Pakistan's economic gain during the last few years its economic reform performance, economic indicators outcome of what he termed as highly successful privatisation programme and Islamabad's geo strategic importance for the region.

OGDC Managing Director/Chairman Arshid Nasr and Executive Director (joint ventures) Najam Kemal Hyder gave presentation on the company's profile and prospects in oil and gas production.

Briefing the newsmen about the outcome of the government's efforts to make OGDC GDR a success, Zahid Hamid said Pakistan's campaign to present its case of economic growth in the world market was a great success, and expressed optimism that foreign investors would prefer Pakistan for investment over other destinations. He listed concessions granted by the government to investors, and termed them as highly investment-friendly.

The minister said Pakistan's economic recovery during the last six years has been impressive and listed various factors, which make it attractive for investment.

He, in particular, mentioned Islamabad's result-oriented economic reforms, positive trend shown by all its economic indicators, sharp increase in remittances, reducing inflation rate, manageable payments, and foreign investment in different key sectors and overall broadening of industrial base.

Zahid Hamid said the world was not aware of Pakistan's impressive economic gains and road shows held in UK, USA, Dubai, Hong Kong, Kuwait for OGDC GDR helped the investors have better idea of Islamabad's achievements during the last few years.

He said OGDC GDR will bring Pakistan into the world reader, adding that financial consultant was finalising technicalities such as its size and pricing mechanism.

The minister said the Privatisation Commission would offer 10-15 percent OGDC shares for GDR at the London Stock Exchange and the Karachi Stock Exchange. Zahid Hamid said the Privatisation Commission would follow two-pronged strategy for Pakistan Steel Mills sell-off. It included 10 percent initial public offering (IPO) that would be followed by its strategic sale.

The minister was convinced that Pakistan Steel Mills' future was in strategic sale, and termed the review petition pending in the case as a separate issue.

He told a questioner that OGDC GDR proceeds would go as per privatisation law - 90 percent for debt-retirement and 10 percent for poverty alleviation.

Arshid Nasr, in his presentation, said OGDC was a big national asset, and it was well poised to take local oil and gas production to the new heights.

The OGDC was mulling different options for investment in the oil and gas sector outside the country, he said, adding the OGDC will meet the deadline of December 31 for offering GDR through the London Stock Exchange.

Najam Kemal Hyder briefed the newsmen about OGDC's operations in different parts of Pakistan to explore oil and gas. The OGDC was taking a number of initiatives to explore oil and gas in different untapped areas, he added. Najam said the OGDC was following the international standards to maintain its accounts and exploration rules.

SECOND OFFER FOR GDRS The Oil and Gas Development Company Limited (OGDCL) will make second offer of 10-15 percent shares for global depository receipt (GDR) through London Stock Exchange, which is expected this year.

The company, with 37 percent shares oil reserves, 32 percent shares gas reserves, besides 59 percent oil production and 25 percent gas production, is the largest upstream player in Pakistan.

This was stated by the OGDCL Chairman Arshad Nasar here in a press briefing on Wednesday while announcing details of the secondary offer of 10-15 percent shares on Karachi and London Stock Exchanges, which is expected this year. Minister for Privatisation and Investment Zahid Hamid was also present on the occasion. The money received through GDR would be utilised in debt retiring under government's privatisation plan, he said.

He said that OGDCL is producing 72 mmboe combined oil and gas with the total reserves of 1,609 mmboe including probable reserves. The probable reserves are 530 mmboe, he added.

He said that net sales of OGDCL in 2002 steadily rose from Rs 41,979 million to Rs 97,309 million in 2006 raising its net income over five years from Rs 17,529 million to Rs 45,803 million showing over 250 percent increase, while cash from operating activities rose from Rs 20,986 million in 2002 to Rs 43,611 million in 2006.

Total debt remaining constant at Rs 15 million over all five years with assets and cash increasing each year show robust growth in the OGDCL revenue and thus justification of 10-15 percent shares for GDR in the Karachi and London Stock Exchanges, some time later this year, he added.

The OGDCL holds 75,905 sq km, largest, exploration acreage amounting to 39 percent of total of 195,904 sq km, he said. He said that the projected 13 percent CAGR up to 2009 provides strong base for production growth, in which oil CAGR is 14 percent and that of gas is 13 percent.

Like this, he said, OGDCL is a self-sufficient company, which can bear all its expenses with its own resources and there would be no need for foreign loans for further developments.

Throwing light on the productive activities of OGDCL, the Chairman said that the company drilled 30 wells, at least double the normal practice of 12 to 15 wells a year and pledged to drill 41 wells during the current year, he added.

Further proving his point, he made a comparison of shareholder returns of OGDCL with FTSE (all share price index) and oil and gas peer index, which showed marked difference; with OGDCL 303 percent, oil and gas peer index 112 percent and FTSE 38 percent indicating strong trends of OGDCL. Najam K Hyder, Executive Director of Corporate Affairs, Aftab Ahmad, Executive Director of Finance, attended the meeting.

Copyright Business Recorder, 2006