CCoP directs to complete shares divestment of Mari Petroleum

In Mari Petroleum, the government holds a 20% stake, OGDCL  20 per cent shareholding, Fauji Foundation 40 per cent and the general public holds 20 per cent shares

ISLAMABAD: The Cabinet Committee on Privatization (CCoP) has directed to complete the divestment process of 18.39 per cent shares in Mari Petroleum Co. Ltd (MPCL) within the stipulated time.

The cabinet body had taken up the matter of divestment of government’s shares in it recent meeting.

In Mari Petroleum, the government holds a 20% stake, OGDCL  20 per cent shareholding, Fauji Foundation 40 per cent and the general public holds 20 per cent shares.

Mari Petroleum and OGDCL have the first right of refusal to buy shares of the government in the company.

At present, the government has hired the chartered firm to divest shares of Mari Petroleum. The audit firm is conducting an audit of the value of the shares before divestment.

These two companies were also interested to buy the government’s stakes in Mari petroleum. The PTI government has recently removed the cap on the dividends of the company.

Officials say that the removal of the cap on dividends would fetch a better price for the government during the divestment of shares.

However, there is another view that government should not divest its shares following the removal of the cap.

The officials had informed the policymakers in the government that the government would now be receiving more money after the removal of the cap that it could receive through divestment of shares.

However, the cabinet committee on privatization in a recent meeting has directed the Privatization division to move ahead on the plan of divestment of shares within the stipulated time.

Mari e Petroleum has been operating at a cost-plus fixed 22.5% return on equity since its inception in 1985.

Subsequently, following the ECC’s decision on May 4, 2001, the government allowed Mari petroleum to spend $20 million of its total revenue on exploration activities.

The ECC approved the abolition of the Mari GPA at its meeting on November 12, 2014, replacing the current formula of wellhead gas prices which came into force on July 1, 2014.

The government did it to allow Mari Petroleum to use its resources to carry out oil and gas exploration activities inside and outside the Mari field, including revenue from other sectors and all risks associated with such activities.

About The Author