- SOEs utilise sums deposited in an interest-bearing, offshore, escrow account
A consortium of Pakistan’s oil exploration companies, including Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL) and Government Holdings (Private) Limited (GHPL), together as State-Owned Enterprises (SOEs), have signed definitive agreements for participation in the reconstituted Reko Diq project.
OGDCL shared the development in a notice to the Pakistan Stock Exchange (PSX) on Friday.
“Pursuant to the definitive agreements, the company, alongside the other SOEs, participated in the project through a special purpose vehicle, jointly and equally owned by the SOEs, namely, Pakistan Minerals (Private) Limited (SOE SPV)."
The company said that as part of the transaction and implementation plan agreed under the definitive agreements, the SOE SPV, ultimately, acquired a 25% stake in the project from an existing project stakeholder (first stage acquisition).
“Consideration for the first stage acquisition was paid by each SOE in equal proportion on behalf of the SOE SPV,” said the company.
As per the notice, the SOEs utilised sums deposited in an interest-bearing, offshore, escrow account – such sums totaled $562.5 million in addition to accrued interest, of such total sums the company’s proportional share was $187.5 million in addition to the corresponding proportional accrued interest.
OGDCL shared that following completion of the first stage acquisition, the SOE SPV’s stake in the project was restructured through a series of offshore holding companies – the SOE SPV’s and by extension, the SOEs’ stake in the Project, however, remained unchanged at 25%.
One of the largest undeveloped copper-gold projects in the world, Reko Diq is owned 50% by Barrick, 25% by three federal state-owned enterprises, 15% by the Province of Balochistan on a fully funded basis and 10% by the Province of Balochistan on a free carried basis.
Barrick Gold Corporation completed the reconstitution of the Reko Diq project, days after the Supreme Court of Pakistan last week declared the new Reko Diq mine deal legal and urged all provinces to amend their laws in accordance with the agreement.
Barrick president and chief executive Mark Bristow on Friday said the completion of the legal processes was a key step in progressing the development of Reko Diq.
“We are currently updating the project’s 2010 feasibility and 2011 feasibility expansion studies. This should be completed by 2024, with 2028 targeted for first production,” Bristow added in the statement.
“We envisage a truck-and-shovel open pit operation with processing facilities producing a high-quality copper-gold concentrate. We expect it to be constructed in two phases with a combined process capacity of 80 million tonnes per annum.”
During peak construction, the project is expected to employ 7,500 people and once in production it will create around 4,000 long-term jobs. As elsewhere in the group, Barrick prioritises the employment of local people and host country nationals, according to its statement.