Daily Times

The Cabinet Committee on Privatisation (CCoP) will consider the Petroleum Ministry’s proposal regarding divestment of the government’s shares in Pakistan Petroleum Limited (PPL) and Oil and Gas Development Company Limited (OGDCL) in its meeting on Wednesday (today).

Finance Minister Shaukat Tarin will chair the CCoP meeting to discuss the longstanding issue. The committee will also deliberate upon the private sector’s participation in the management of DISCOs.

The government faces a setback in the case of divesting shares in OGDCL and PPL as the Petroleum Division objected to the divestment through public offering. Following a decision of the government to divest 10 percent shares, share values of the two companies had declined sharply.

The Privatisation Commission had informed the CCoP that the Petroleum Division had opposed the divestment through a public offering.

The federal government in August last year had approved the offer of a 7 percent stake in OGDCL and 10 percent in PPL through public offering. However, the CCoP noted that the cabinet had already notified the decision of offloading shares in the two energy companies through public offering.

Petroleum Division officials were of the view that brokers had manipulated share prices of the two companies that stood at the lowest levels in the market. They said that the government should offer shares of the two companies to strategic investors to fetch a better price. They added that the strategic investors would also commit to investing in oil and gas exploration companies.

Hence, the decision to offer shares to the strategic investors will also bring investment in addition to a better price offer. They said that it was not an ideal time as share prices were very low. In 2014, share prices of these companies were double but the past government did not offload the shares. Now, share prices have been reduced to less than half.