Pakistan Drops OGDCL Share Sales Plan

Pakistani government has decided to drop the plan to sell a part of its stake in Oil and Gas Development Company (OGDCL) on the stock market and instead would offer 10% of its shares to an international firm, the government said in a statement late last week.

The government had planned to offload a 7% stake in OGDCL on the Pakistan Stock Exchange as part of its disinvestment programme undertaken to raise money to generate non-tax revenue to retire the national debt.

Pakistan’s ministry of privatisation discussed the share price trend of OGDCL and also the extent to which the capital market is conducive for such divestment of shares. “The option of strategic sale of up to 10% shares of OGDCL was also deliberated upon and it was decided that the better option would be the strategic offering of up to 10% shares to international reputable exploration and production (E&P) companies,” the government said.

OGDC’s share price has dropped sharply since August last year when the government announced its decision to sell a 7% stake and has almost halved since 2014 when the government last attempted to sell stake in the company. The government holds a 74% stake in OGDCL while the remaining 26% is held by private investors.

The government said that the strategic sale will open the Pakistani E&P sector to foreign direct investment and bring in new expertise to OGDCL. It has now decided that the matter would be submitted in the upcoming meeting of the cabinet committee on privatisation.