Ishrat, Tarin have differences

ISLAMABAD: Finance Minister, Shaukat Tarin and Advisor to Prime Minister on Institutional Reforms and Austerity, Dr. Ishrat Hussain are said to have differences regarding divestment of GoP’s shares in Mari Petroleum Limited (MPL), sources close to Secretary Petroleum told Business Recorder.

The Cabinet Committee on Privatisation (CCoP) met to discuss a proposal of Petroleum Division in which the latter proposed that the GoP should maintain its shareholding in MPCL and the Company may be omitted from the list of privatization/divestment by Privatisation Commission as it would be in the greater national economic and general public interest.

During the ensuing discussion, the Finance Minister observed that a decision should be taken in the light of information on financials of the company. Petroleum Division must come up with complete business proposal indicating return on investments.

The Finance Minister further contended that though the cap has been removed by the Economic Coordination Committee (ECC) yet the return on the investment received is very low. Therefore, Petroleum Division must make a complete business model with various options justifying retention or sale of shares.

Dr. Ishrat Hussain reportedly supported the proposal of the Petroleum Division. He stated that it is one of the better performing organizations of the government and managed by a strategic partner. The government must keep its stakes to ensure exploration in far-flung and difficult areas of the country therefore it is beneficial for the GoP to retain a seat on the board of Mari Petroleum due to its strategic importance. He also stated that after removal of the cap on the distribution of the dividend, it was expected that GoP would get more dividend in future due to new exploration and production.

Privatisation Division indicated that the JV partner has the option of priority share buying. It took one year for the Privatisation Commission to remove the cap on the shares and to convince the partner to show an interest in government shares. The Finance Minister stated that an informed decision can only be taken if present and future scenarios with business model are presented.

CCoP deferred consideration of the proposal and directed the Petroleum Division to give firm justification for proposed divestment of GoP's shares in Mari Petroleum Company Limited based on a business model showing returns on investment. The model must indicate the projected profit/return of the company in view of reinvestment plans for future exploration and present it within two weeks before the CCoP.—MUSHTAQ GHUMMAN