ISLAMABAD: Pakistan Petroleum Limited (PPL) is likely to acquire assets of MND Exploration and Production Ltd in Pakistan and Yemen through share purchase, sources close to Petroleum Minister told Business Recorder on Saturday.
PPL, a public limited company incorporated under the Companies Ordinance 1984(XLVII of 1984), has embarked upon an aggressive exploration program and acquisition of oil and gas assets both locally and internationally to replenish and possibly enhance the company's oil and gas reserves.
MND Exploration and Production Limited (MND) a wholly-owned London-based subsidiary of KKCG SE, one of the largest privately owned groups in the Czech Republic, recently announced to divest its entire interest in oil and gas assets in Pakistan and Yemen.
MND is presenting this opportunity as a corporate sale. Interested parties have been invited to structure a cash offer preferably for the entire share holding of MND and any offer for a part of the package will not be attractive for the seller. The bid date for the assets is Friday, May 18 next week.
MND's assets in Pakistan include: (i) Sawan Development and Production lease (7.8947 percent share and exploration licences; (ii) Harnai (40 percent); (iii) Ziarat (40 percent); and (iv) Barkhan (50 percent) in Pakistan together with exploration licence block-3( 20 percent) in Yemen. All assets under the deal are non-operating interests.
Sawan Gas field is located in Sindh province. PPL already holds 26.2 per cent working interest in the Sawan gas field, which is currently producing 220 mmcfd gas and is one of the largest gas fields in Pakistan with further development potential through unconventional resources of hydrocarbons.
Mature drillable prospects are present in Barkhan (operator -PPL) and several prospects also exist in Ziarat and Harnai blocks.
Block-3 is located in the oil and gas producing Shabwah basin of Yemen. Oil search of Australia is the current operator; however, Total of France is potentially taking over the operatorship of the block. OMV, MND and Yemen Oil and Gas Company are other joint venture partners. Tubb'a gas and condensate discovery situated within the block is pending appraisal, the sources added.
In addition to the discovery, the block also holds multiple potential prospects and leads. The block offers long term investment opportunities in the producing region of the country. The Pakistan and Yemen Exploratory assets offered by MND have good hydrocarbon potential in addition to the enhanced revenue potential of Sawan gas field. Acquisition of MND by a Pakistani company would result in foreign exchange savings by Pakistan representing: (i) remittances of dividend/ profits by the purchased subsidiary in UK to Pakistan; and (ii) recovery of its share in oil and has reserves.
Furthermore, the transaction will give an opportunity to PPL, being a national company to project the country's soft image outside Pakistan.
The sources said Board of Directors of PPL has approved in principle the submission of bids for MND's assets including Yemen block as a corporate level deal. PPL has appointed Financial Advisor (FA) who together with other consultants and PPL's in-house teams are evaluating the proposals in detail.
Based on the evaluation, PPL with the assistance of FA will determine a value for bidding keeping in view the interest of the country, company and its shareholders.
Keeping in view the opportunity to enhance hydrocarbon reserves of PPL and long term savings, as well as regular source of earnings of foreign exchange, following recommendations have been submitted to the federal government for approval: (i) PPL may be authorised to submit a bid for corporate for corporate acquisition of MND, exploration and development limited, a company incorporated in UK, which bolds assets in Pakistan and Yemen; and (ii) foreign exchange requirement to be provided on a repatriable basis against rupee cover by PPL from its own resources.-MUSHTAQ GHUMMAN
Source: Business Recorder
