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GoP to disinvest minority stakes in oil, gas fields

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Privatization Commission has announced the divestment of Government of Pakistan's (GoP) minority working interest in oil and gas fields in a phased manner.

Investment banks, well-versed with divestitures preferably in the upstream oil and gas sector and duly supported among other leading legal technical and accounting firms, have been invited to submit their 'Expression of Interest', for acting as qualified Financial Advisory (FA) Group in assisting GoP to divest its working interests in nine oil and gas fields, covered under various petroleum Concession Agreements, in the first phase.

Donors asking govt to finance $70 million cost overrun

The government is under pressure to finance the cost overrun of Rouseh power project, sponsored by a private power producer, amounting to around $70 million, it is learnt. Sources toldthat international donors and the management of the Rouseh power project, are pressurising finance ministry to fund the cost overrun of Rouseh from the $1 billion World Bank power sector loan, $800 million of which has already been utilized.

The Rouseh management has told the finance ministry that the cost overrun of its project is the consequence of delays caused by Wapda so the government should finance it from the loan it had acquired from the World Bank for energy sector development projects.

The company has indicated that if it is not provided $70 million immediately, it will go into international arbitration.

The World Bank, these sources added, has asked the government to take a decision on the matter immediately and indicated that Rouseh might go for international arbitration if not provided the demanded financing.

Long Term Credit Fund (LTCF), a body set up under the WB-GoP loan agreement to supervise the loan and to restructure the power sector infrastructure, has set conditions including obtaining clearance from Wadpa, PPIB and ministry of water and power and Ehtesab Bureau before the release could be considered.

Interestingly the Rouseh had an agreement with the NDFC for $40 million for cost overrun and for the last three years it had paid over Rs60 million to NDFC as commitment charges. But now it has told the GoP that this loan is very expensive so it wants the financing from the WB loan.


Exploration work at two more wells

The Oil & Gas Development Co (OGDCL) has spudded exploratory well in Siah Koh (Balochistan) at Burzi and Lashari well No 4 in Lashari Centre in Sindh.

In order to meet the target for the year '98-99, OGDC has accelerated exploration activities.

According to an OGDL press release, the Burzi well No. 1 and Lashari well No. 4 is the 8th & 9th well spudded during the current financial year. Apart from these nine wells, a deep drilling rig at Toot well No.15 is in process for Jurassic sands and results are expected soon.

The Burzi well No. 1 is being drilled which was awarded to OGDCL in '97. The well is located 30 kms East of Barkhan Town and 19 kms south west of Rakhni in Balochistan.

The well will be drilled up to 2750 meters to test the hydrocarbon potential of Cretaccous and Jurassic reservoirs. With the start of drilling at Burzi well No. 1, hydrocarbon exploratory efforts are in process in all the four provinces.


BHP's more drilling success in Sindh

The Broken Hill Proprietary (BHP) Company of Australia on Tuesday announced further drilling success on the Zamzama field in Sindh.

According to a press release, Zamzama-2- an appraisal well located 3.51bn South of the Zamzama-1 exploration well drilled to a total depth of 3933m and encountered hydrocarbons in the Khadro and Pab formations. Subsequent pressure testing and wireline log data confirmed a combined gas column in excess of 350 metres.


Coal-based power generation

Pakistan should exploit the vast reserves of high quality coal in Thar and Lakhra (Sindh) as a cheap source of power generation, says Ahmaduddin Hinjra, Head of the Sindh Coal Authority (SCA).

Hinjra said these huge coal reserves should be utilized to replace oil-fired plants. Quoting a recent study in the United States he said that coal fired plants are a cheaper source of power generation than the gas-fired or oil-fired plants—costing 1.6 cent per kilowatt hour, 2 cent and 2.5 cents respectively.


Pasni power project to be functional next year

The second and final phase of power project at Pasni along Balochistan coast is expected to be fully functional by next year with the provision of more than Rs 256 million made for the purpose, official sources said here Friday.

Pasni power plant involves total development outlay of Rs 1,165m including Rs 500m British aid.


ITP for Opal glassware

Omer Glass Industries Limited have represented to the Central Board of Revenue regarding correct ITP for glassware. According to the representation, the manufacturers have stated that they are the manufacturers of opal glass dinner sets in Pakistan as previously all country's demand was met either through illegal channels i.e. smuggling or brought under personnel baggage and were mostly of French, Korean and Japanese origin. The production of Opal glass dinner sets has discouraged smuggling and country is saving a lot of foreign exchange. The company is facing teething problems as expertise for this technology is not available in Pakistan. The Company is also encountering marketing problems due to import of pyrex glassware. This import is causing considerable loss to the national exchequer as the ITP unit value of the product has been fixed at almost 50 percent of the international standard price. The ITP fixed for pyrex type dinner sets is US $18 to US $20.25 per set against actual price of US $34 to US $65.