By Khalid Hashmani, McLean, Virginia, USA
The article of New York Times pertains to extremely important development that could impact how Sindh survives economically, politically, and culturally in next 100 years. Any thoughtless support or irrational opposition to the upcoming actions of the federal or provincial governments could be harmful to Sindhi interests. In the immediate future, educated Sindhis must get prepared to collect data, analyze data, and take well thought-out and rational actions to safeguard long-term interests of Sindhis. The news about the sale of substantial interests in the Qadirpur Gas field in Sindh and other Sindhi assets (the second largest Gas field Pakistan) has been in industry publications for couple of weeks. The following provides links and brief extracts from those news items:
I sincerely appeal to all List subscribers to be vigilent and share verifiable facts, concerns, and ideas on how and what educated Sindhis in Sindh and overseas can play a role at this crucial hour to safegaurd Sindhi interests.
1. http://www.daily. pk/business/ 55-businessnews/ 6806-pakistan- oil-and-gas- development- company-limited- may-be-up- for-sale. html
Pakistan Oil and Gas Development Company Limited may be up for sale
Thursday, 28 August 2008 00:00 www.daily.pk
Pakistan was yesterday mulling all options, including handing over management control to the buyer, to privatize Oil and Gas Development Company Limited, producing more than one-thirds of domestic crude oil. A meeting of the members of the Board of Privatization Commission (PC) decided the Financial Adviser for Oil and Gas Development Company Limited (OGDCL) would be asked to work out all the options for the company’s privatisation. These options will be sale of shares, strategic sale with management control and assets sale including Qadirpur Gas Field on fast track basis taking into account the observance of all steps strictly in accordance with the legal provisions. Qadirpur Gas Field has gas reserves of about 3.5 tcf, worth $3 billion to $5 billion, and is 75 per cent owned by the OGDCL.
PC board gears up privatisation of OGDC, Jamshoro Power
* OGDC is the largest exploration and production company in oil and gas sector
By Sajid Chaudhry
ISLAMABAD: Privatisation Commission (PC) Board approved the privatisation of Oil and Gas Development Company Limited (OGDCL) till June 30, 2009 and decided to invite fresh Expressions of Interests (EoIs) for the privatisation of Jamshoro Power Company Limited (JPCL) for its privatisation within the current fiscal year. A meeting of the members of the Board of Privatisation Commission was held here on Tuesday under the chairmanship of Syed Naveed Qamar, Federal Minister for Privatisation, Investment and Finance.
Govt may sell out Qadirpur gas field
By IRFAN MALIK August 26, 2008
KARACHI – The government is likely to sell out the country’s second largest gas field, Qadirpur, having gas reserves of about 3.5 tcf worth $3to 5 billion and an announcement in this regard may appear on Tuesday, The Nation learnt.
Moreover, several speculations were circulating at the Karachi stock market that government had already made a deal to sell the field with a Dubai-based company and very soon announce the legal frame work of the expected sale of the field. It was also being speculated that the Qadirpur gas field may be sold at a throw away price.
4. http://www.dawn. com/2008/ 09/09/top11. htm
Altaf opposes plan to sell Sindh assets
By Our Staff Reporter
KARACHI, Sept 8: Muttahida Qaumi Movement chief Altaf Hussain has expressed serious concern over what he called a plan to sell national assets of Sindh to raise money to meet the shortfall in the country’s balance of payments and trade deficit.Source: Daily Dawn)
President to seek China’s investment in energy
President-elect Asif Ali Zardari is expected to visit China next week, after oath-taking on Tuesday, to seek its greater involvement in Pakistan’s energy sector.
“Qadirpur gas field privatisation, Thar coal-based electric power project, hydel power projects, and a few others are on the agenda,” a well-placed source disclosed to Dawn on Monday from Islamabad.
Mr Zardari’s visit to China is a part of a multi-pronged strategy to seek assistance from close friends to take out Pakistan from the current deep economic crisis. “We need immediately a few billion dollars to meet foreign payment obligations and our friends’ help to build up our fast depleting foreign exchange reserves,” Ikhtiar Baig, a leading denim manufacturer and exporter and member of thee PPP’s Policy Planning Cell s….
Pakistan Considers Asset Sales to Bolster Economy
Courtesy and Thanks: The New York Times
By Heather Timmons
September 9, 2008
Pakistan plans to sell valuable energy assets, beginning with a major gas field, as it tries to reap billions of dollars from deals with investors in industries like banking and farming.
The move comes as Asif Ali Zardari, the widower of former Prime Minister Benazir Bhutto, is stepping in as president.
Because of a hefty oil bill and a slowing economy, Pakistan is struggling under its biggest budget deficit in a decade, $21 billion; inflation that hit a 30-year high, 24.3 percent, in July; and fast-rising unemployment that is projected to reach 6.6 percent in 2009. Government leaders are eager to raise money, quickly.
“The government is going through all their funding options,” a banker advising the Pakistani government said. Financial advisers to the government spoke on the condition of anonymity so as not to alienate their client.
The Qadirpur gas field in Pakistan, a natural gas reserve of 2.9 trillion cubic feet in the Indus River flood plain, may be one of the first big-ticket sales. The field, the second-largest in the country, is valued at about $3 billion.
Bids for the field, about 260 miles northeast of Karachi, may be submitted in the next week or so, bankers say. Likely bidders include foreign companies already involved in Pakistan’s energy industry, like Kuwaiti state corporations and OMV, a private Austrian energy company.
“They’re testing the market with an auction,” said an energy banker who asked to remain anonymous because he was pricing the deal for a client.
The selling of the Qadirpur field could be controversial because it is considered a strategic asset. Pakistan imports more than three-quarters of its petroleum and is struggling to become less dependent on imports. But a person close to the deal said there were no guarantees that the field would be sold. He characterized the bid solicitation as an informal process. He asked not to be named because he was not authorized to speak publicly about the deal.
Some investors are questioning the wisdom of Pakistan’s selling valuable assets and are wondering whether sales will be conducted transparently and fairly.
But there is no question that the country needs to raise money, analysts said.
Pakistan’s economic situation is “a result of rising commodity and food prices, exacerbated by a lot of pre-election spending by the previous government,” said Gareth Price, head of the Asia Program at Chatham House, a research center in London, referring to the general elections held in February.
In an effort to win votes, the previous government, led by Gen. Pervez Musharraf, kept subsidies high on food, electricity and oil, helping drive up the budget deficit.
The sale of the Qadirpur field is part of a full-scale review of the biggest energy company in Pakistan, Oil and Gas Development, which owns 75 percent of Qadirpur. The review is being led by Merrill Lynch.
Pakistan’s privatization commission said in late August that it also planned to offer stakes in Kot Addu Power on international stock exchanges this year and to privatize Hazara Phosphate Fertilizers. It invited bidders for 51 percent of Jamshoro Power, a long-discussed privatization deal. Salt and coal mines are also scheduled to be privatized.
The list of state assets for sale may not necessarily be followed by deals, analysts warned. “Talk of investing huge sums of money doesn’t always materialize, because people are put off by the political machinations” in Pakistan, Mr. Price said.
Pakistan’s “economic curse” is that the ruling elite — civil servants, politicians and the military — have worked in their own interest, not that of the wider population, limiting how much capital the country can raise, he said.
One possible source of new investment is the Middle East.
“There is a cultural and long-term affinity between the two regions,” said Youssef Nasr, the chief executive of HSBC in the Middle East. Saudi Arabia and Abu Dhabi, in particular, have been strong supporters of Pakistan.
Investors from the Middle East have already bought stakes in telecommunications, banking and industrial companies in Pakistan and have been pleased with the results, he said.
One area of cooperation between Pakistan and the Middle East may be agriculture. The arid climate of the Middle East, coupled with rising food prices, has ignited fears about food security. Pakistan, meanwhile, has swaths of arable land that is lying fallow. Government officials on both sides are exploring links that could lead to joint farming ventures, Mr. Nasr said.
“It’s not going to be a huge industry, by international standards,” he predicted, but it could be large enough to make a difference to Pakistan’s economy.
The Pakistani government plans to raise money in ways besides asset sales and joint ventures. Pakistan’s central bank said on Thursday that it would sell bonds compliant with Islamic law in the domestic market and that the World Bank would “fast track” $1 billion in planned investments in the country.
Attempts to privatize and sell some state-owned assets have proved contentious. The government’s plans to sell Pakistan Steel to a group of investors in 2006 were overturned, in part because the agreed-upon price was deemed to be about a third of the $1 billion value. Other sales of equity stakes have gone through with less controversy. In June 2007, United Bank Limited of Pakistan raised $650 million on the London Stock Exchange.
One bright spot for the county’s economy has been remittances, or money transferred home by Pakistanis working outside the country, which are on the rise, Mr. Price said. The government is lobbying to get more permits for workers to travel to the Persian Gulf, from which most remittances are sent.