- Company says any information in circulation about settlement plan might be speculative
Oil and Gas Development Company Limited (OGDCL) on Friday said it has yet to receive any formal communication from relevant authorities over the issue of circular debt settlement.
In a notice to the Pakistan Stock Exchange (PSX), it said the company’s board of directors convened meetings on August 10 and August 17.
“Several news articles have recently addressed the issue of circular debt settlement. We would like to clarify that, as of this date, we have not received any formal communication from the relevant authorities,” the OGDCL notice stated.
“Thus, any information in circulation about a settlement plan might be speculative.
“We encourage stakeholders and the public to rely exclusively on official communications for accurate information.”
Its remarks come after media reported last week that the (then) government has shared its draft plan to reduce the stock of gas sector circular debt with the International Monetary Fund (IMF). A government official, not named in the report, was quoted as saying that the proposed plan is a mix of non-cash book adjustments and tariff rationalisation that could be implemented only after the concurrence of the IMF.
OGDC and PPL’s share prices have risen in recent weeks on expectation that the circular debt issue would be resolved through these adjustments.
However, both stock prices retreated after the OGDC notice on Friday.
Power sector in Pakistan has remained a major source of concern with circular debt putting a burden on the government’s kitty. The government has moved to raise tariffs, but the stock of debt has not shown signs of slowing.
Meanwhile, the OGDC notice also stated that the board has approved hiring the EPCC Contractor for the KPD-TAY compression project.
“The completion timeframe of the project is set at 16 months, spanning from the establishment date of Foreign Supply, Letter of Credit to the successful performance testing of all Compressor Packages.”
The company said it was committed to indigenisation to bolster self-reliance and fortify its domestic economy using local resources and technologies.
The notice shared the company’s goals, which included minimising exports, conserving foreign reserves, and helping enhance trade balance by backing local industries.
Securing continuous material supply with alternative supply chains for the operations is also of OGDCL’s goals.