Zubair claims it’s no privatization

ABDUL RASHEED AZAD & WASIM IQBAL

ISLAMABAD: The government will determine floor price of the planned off-load of 7.5 percent government’s shares in Oil and Gas Development Company (OGDCL) on November 5, 2014. This was stated by State Minister for the Privatisation Commission (PC) Mohammad Zubair at a press conference here on Thursday. Mohammad Rafi Managing Director (MD) OGDCL was also present.

“We are not going to change the structure of the company, not management and not going to sack any of the employees of the company so it should not be termed a privatisation of the company. As per commitment with the International Monetary Fund (IMF) it is necessary to off-load the government shares in OGDCL,” the minister added.

He said a meeting of the Cabinet Committee on Privatisation (CCoP) and PC board on setting the floor price of OGDCL shares will be held on Nov 5.

He added that the strike price of shares of state owned oil/gas company will be decided on Nov, 7, 2014 at the CCoP-PC board meeting.

He said that it is only a capital market transaction; it is no privatisation of the entity; and it is being carried out on the patterns of 2004 and 2006 when the government off-loaded 15 percent of its shares.

He revealed that today (Friday) he will join a Pakistani team currently in negotiations with the IMF to explain the reasons and causes for the delay in off-loading OGDCL shares and privatization of other entities.

Zubair said the government was expecting $1.2 billion revenue from off-loading 42% government shares in Habib Bank Limited (HBL) in international and domestic capital markets, which is expected in March 2015.

“This privatisation process is so critical to building up foreign exchange reserves to improve the micro-economic condition of Pakistan. We should not delay the off-loading process of the OGDCL shares as it will create a negative impact on the overall privatization plan. A total of 322 million shares of the state run oil/gas company are in the off-load plan, which will generate an estimated $770 millions,” he maintained.

The entire process was planned to be completed in September but due to a political crisis in the country it was delayed, adding that in the meanwhile international oil/gas prices registered a significant reduction and consequently OGDCL share prices were also reduced from Rs 250 per share to Rs 227 per share; the Minister added. He said the government on the perception that oil/gas share prices in the capital market may go up could not further delay the off-loading process of the OGDCL shares as there is no guarantee that shares’ prices will soar.

Speaking on the occasion, MD OGDCL, Mohammad Rafi said that each and every employee of the company was aware of the off-loading of the OGDCL shares, adding that some people were trying to take political mileage by opposing the process.

Rafi said the OGDCL has started spudding of 35 new oil/gas wells and for this purpose 23 locations have been earmarked. The company is operating with 10 state of art rigs and drilling of each oil/gas well requires millions of dollars. The impact of all these exploration activities will add to net value of the company’s shares after 2 to 3 years.

Meanwhile, opposition parties Pakistan People’s Party (PPP), Jamaat-e-Islami (JI) and Awami National Party (ANP) staged a walkout from Thursday’s sitting of the ongoing session of the National Assembly in protest against police action on workers of Oil and Gas Development Company Limited (OGDCL). Muttahida Qaumi Movement (MQM) did not join the protest against the PML-N government.

Abdul Rasheed Godil of MQM said that protest is a democratic right of workers. He underscored the need for constituting a committee to investigate the incident.

Replying to points raised by leader of the opposition and others, Interior Minister Chaudhry Nisar Ali Khan assured the House that a high-level inquiry would be conducted into the incident and a report would be presented in the House. He said the government would safeguard and protect the rights of the labourers and workers.

He said that the House should decide about the place and limitation of the protest.

Later, Opposition leader said, “The Prime Minister is facing such situation due to the ministers’ attitudes and their actions. Today, democracy and state are facing problems due to incompetent people.”