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KPOGCL- Becoming an attraction for investors

Company is committed to expand by attracting national and international investors

KPOGCL was incorporated as a Public Sector Enterprise (PSE) on 8th February, 2013 under Section 32 of the Companies Ordinance, 1984. Later, KPOGCL was declared as fully-owned Provincial Holding Company (PHC) of GoKP pursuant to clause 4.1.3 (6) of Petroleum Exploration and Production Policy-2012.

The Company is established to engage in Oil & Gas Exploration and Production, including development and sale of oil and gas and related activities. The Company also provides Technical, Security, Marketing services to other National and International Exploration & Production and service Companies. KPOGCL turned around the Oil & Gas in KP from very low activities to the highest in Pakistan through its well carved multi-fact strategy just in 4 years of its establishment. It is due to its tireless efforts that the Province has become the largest oil producer in Pakistan.

Public offering & private placement-very soon

KPOGCL has the following Vision by 2025:

KP’s Oil Production200,000 BPD
KP’s Gas Production2,000 MMCFD
KP’s LPG Production3000 Tons Per Day

In order to achieve its ‘Vision 2025’, KPOGCL has developed a sustainable strategy from every angle, including high caliber human resource, second to none software, and diversified funds. In Khyber Pakhtunkhwa, the probability of success is one of the highest in the region, which is a comparative advantage of the Province & KPOGCL. In order to exploit the comparative advantage through partners and multi-facet investments, of which tapping the financial capital markets and the Public Offerings are considered to be the most efficient and main pillars of the “Mission“.

KPOGCL has strong growth prospects, both in near term and long-term. The strong future growth prospects can earn huge ‘Premium’ through IPO of the Company. Dhok Hussain discovery will contribute very positively to the near-term growth in Sales and Profitability of the Company while its continuous engagement in Exploration activities will increase its reserves portfolio. Successful exploration activities are critical to the sustained long-term growth in future earnings. KPOGCL is highly likely to be awarded the status of ‘Green Field’ project which will further add to the amount of ‘Premium’ to be raised through public.

Prior to Public Offering, KPOGCL intends to make Placement of its equity shares with Large Funds and High Net Worth Individuals (HNWIs) and in order to ensure transparency, a fair price determination through ‘Private Book Building’ is under process.

Establishment of energy asset management company

In order to achieve its Vision & Mission, besides Public Offering & Private Placement, KPOGCL is striving to establish an Energy Asset Management Company in the Province. The Energy Asset Management Company will be established as a Non-Banking Financing Company (NBFC) under section 509 (1) of the Companies Act, 2017 and NBFC Rules, 2003. The prospective investors include diaspora, multi-national banks and international equity investing financial institutions besides National individuals and equity financing institutions.

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Discovery in Baratai Block

On 21st December, 2017, KPOGCL achieved well-deserved success in Baratai Petroleum Exploration Block, where KPOGCL has a 2.5% Working Interest with OGDCL, the largest National Oil Company (NOC) of Pakistan. Oil & Gas has been discovered in the first Exploratory well (Dhok Husain-1) in a record time of 6 months in the history of Khyber Pakhtunkhwa. The well has tested 30 MMCFD of Natural Gas and 760 BPD of Oil/Condensate from only two reservoirs sheets, while remaining reservoir sheets are yet to be tested.

Operatorship in Lakki Block

In addition to JV partnerships, KPOGCL is the first and only PHC that will be carrying out Exploration and Production activities as an Operator in one of the most prospective blocks of the Province named “Lakki Block” for which Provisional Letter of Award (LOA) has been granted by DGPC-Minstery of Energy (Petroleum Division). Lakki block is 2028 Sq.km block having expected potential of 60 mmcfd of gas and 4000-6000 barrels of oil per day.

KPOGCL has taken the lead on other PHCs and was able to convince the Federal Government for award of one block ‘without competitive bidding’. Following suit, other provinces were also awarded a block without the bidding process.

 

Investments in other highly prospective blocks

At a very nascent stage i.e. just within four years, the company is into real operations and has joined the league of oil and gas producers in an amicably conducive security environment created not only for itself but for the entire Oil & Gas sector in KP. KPOGCL being the Provincial Holding Company (PHC), has the privilege to have 2.5 % of Working Interest (WI) share in every Exploration Block of Khyber Pakhtunkhwa awarded pursuant to the Petroleum Policy-2012; which means KPOGCL is the owner of 2.5% of more than $100 billion worth of Oil & Gas reserves.

In addition to JV partnership in Baratai where early fruits are ready to be plucked, KPOGCL has entered into JV and signed Deed of Assignment in various Petroleum Exploration Blocks including Paharpur, Pezu, Kulachi, Karak North and Peshawar East. The investment it has made in these Blocks including Pezu, Kulachi and Paharpur are highly probable for success.

Oil refineries in KP

KPOGCL is striving to establish various oil refineries in the Province with the support of national and international investors. These include 40,000 BPD refinery in Karak by FWO; 20,000 BPD refinery in Kohat by Russian investors (M/S Himmash Apparat); and 20,000 BPD refinery in Kohat by M/S SPEC Oil and Gas UAE.

Strong corporate structure

KPOGCL is run by an independent Board of Directors who are mostly experts from the private sector with Mr. Razi Uddin (Razi) as its CEO.

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Mr. Razi Uddin has a vast experience in Oil & Gas sector and has worked with both domestic and international energy sectors. Razi Uddin did his MS and MBA from Michigan and New York universities, served in Pakistan Planning Commission as Chief Energy. He has also served in Saudi Royal Commission as Technical Advisor. He has also been the CEO of Attock Refinery during 1997-2005. Razi Uddin was also the MD of OGDCL from 2005 to 2006. He has been member of the Board of Directors of various oil companies, refineries and Pakistan Steel mill besides highly prestigious educational institutions such as LUMS.

One window of operations

KPOGCL is performing the role of ‘One Window of Operations’. It is not only entrusted with the responsibility of carrying out E&P activities, but also entrusted with the responsibility to allure more E&P companies by ensuring them with the requisite security and the first hand sharing of technological data thus literally acting as a fast track implementation of E&P. KPOGCL address investors’ problems and work as a conduit to other Departments.

Right time to invest in KPOGCL

KP has the potential of 1.1 Billion Barrels of Crude Oil resources and Natural Gas resources topping 16 Trillion Cubic Feet (TCF). Exploration as Operator in 7 Blocks identified by KPOGCL namely Lakki, Nowshera, DIK East, DIK-West, Miran, Khusahal and Charsadda will be carried on fast track basis. NOCs for these blocks have been received from Ministry of Defence while applications have been submitted to DGCP for calling of Bidding round.The Company has already marketed these Exploration Blocks to national and international investors. Revenues from these blocks are expected to be high, being prospective blocks.

The merger of ex-FATA into KP has increased opportunities for KPOGCL multi-fold. Ex-FATA offers some 20 TCF of Natural Gas which will become an earning source for KPOGCL. The Government of Khyber Pakhtunkhwa is also supporting the company by allocating Billions of Rs in its budget.

KPOGCL is inviting national and international oil companies to join in its operations in blocks including Lakki block. KPOGCL can share with prospective investors the preliminary information on geology, expected success and economics of its blocks includig Lakki.

It is only a matter of time now that the financial outlook of the company would translate the four years of hard work. National & international investors, HNWIs, private equity managers are strongly encouraged to consult KPOGCL for prospective, fruitful and timely investment.

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