The Cabinet Committee on Privatisation (CCoP) has approved divestment of GoP''s shareholding in Mari Petroleum Company Limited (MPCL) either through incumbent Joint Venture or stock market. The sources said MPCL was incorporated in 1984. The current composition of MPCL''s shareholding was Fauji Foundation 40%, Oil and Gas Development Company Limited (OGDCL) 20%, Government of Pakistan (GOP) I 8.39% Benazir Employees Stock Option Scheme (BESOS) Employees Trust 1.61% and NIT/NBP/SLIC/ general public 20%.
MPCL has been on the privatization list since May, 29 1997, and the CCoP, in its meeting held on October 03, 2013, approved a list of State Owned Enterprises (SOEs) for early implementation of the privatisation programme, which included privatisation of MPCL.
According to sources, process for divestment of GoP''s shareholding in MPCL was initiated in November, 2014. During the process of consultation, the Ministry of Petroleum and Natural Resources revealed that Fauji Foundation [the parent company of MPCL] enjoys the right of first refusal in case the GoP decides to off- load its shares and that NoC/consent of the Joint Venture partners viz. Fauji Foundation and OGDCL, was required for the divestment of GoP''s shareholding in MPCL. Later, Ministry of Petroleum and Natural Resources expressed concerns regarding the divestment of MPCL, including the potential loss of Rs 80 million per annum of guaranteed dividend income and the need for presence of GoP representatives on MPCL''s board of directors for the implementation of the ECC''s decision for dismantling of Mari GPA and requested that MPCL may be deleted from the list of companies being considered for privatization.
The sources maintained that the net sale proceeds from the divestment of GoP''s shareholding exceeded the present value of total future annual dividends, and that issue of implementation of the ECC''s decision could be handled through the nominees of OGDCL on MPCL Board. The PC has also proposed that if the divestment is still considered essential then it may be carried out after a five year period.
Recently, PC Board in its meeting recommended placing the case before the CCoP for consideration. Secretary, Ministry of Petroleum and Natural Resources informed the CCoP that the Government of Pakistan was under a contractual obligation in terms of the participation and shareholders'' agreement signed between Government of Pakistan, Fauji Foundation and Oil and Gas Development Company Ltd to obtain the written consent /no objection of Fauji Foundation and OGDCL for the proposed divestment of shares. He further stated that the Fauji Foundation and OGDCL had expressed interest in purchasing shares in case of divestment.
After a detailed discussion, the CCoP approved the proposal, in principle, of divestment of GoP''s shareholding in Mari Petroleum Company Ltd either through the JV partners (Fauji foundation and OGDCL) or stock market; and directed to complete the codal formalities within a month in case of divestment of shares to the JV partners.
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