Two Canadian energy companies are interested in buying Pakistan''s biggest state-run natural gas producer in a privatisation that has attracted such global power houses as BP PLC, Austrian OMV, and UK-based BG Group PLC. Calgary-based Centurion Energy International Inc and International Sovereign Energy Corp are among 11 international companies that have submitted formal expressions of interest (EoIs) to buy a 51 percent management stake in the Pakistan Petroleum Limited, which produces one-third of the gas consumed in the nation of 150 million.
The PPL is Pakistan''s third-largest listed stock on the Karachi Stock Exchange (KSE) with the current market value of about US $2 billion. Pakistan plans to sell majority stakes in the PPL later this year as part of its aggressive privatisation plan, which includes sale of controlling equity stakes in the Pakistan Telecommunication Company (PTCL), Pakistan State Oil (PSO), which runs the country''s oil distribution and marketing, and a 51 percent stakes in its biggest state enterprise, Oil & Gas Development Company (OGDC).
Canadian companies executives said they are likely to team up with other companies to bid for the PPL. "The money is not really a big issue if we see some value in this asset. We''ve the backing of one or two partners to bid with us", said Centurion Energy President and CEO Arrata.
Centurion, with operating assets in Egypt and Tunisia, is one of several Calgary-based junior players to hit it big on international scene and see their stocks soar in the past year. International Sovereign Energy, other Canadian potential bidders, are already involved in oil exploration in Pakistan.
Pakistan plans to pre-qualify potential buyers in next two weeks before they can start due diligence to value the PPL, which has proven and probable natural gas reserves of 6.9 trillion cubic feet and oil reserves of 15 million barrels. The PPL made a $112-million profit on $300 million in revenue in the year ended June 30. Based on current market value, the PPL could fetch up to $1 billion for a 51 percent stakes. But analysts say that is unlikely to happen because international investors are likely to attach political risk to PPL''s assets.
The PPL runs Pakistan''s largest gas field at Sui, in the troubled Balochistan, where militants attacked its facilities and disrupted gas supplies earlier this year.
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