BP assets: OGDCL-PPL bid significantly lower

PPL out, OGDCL hanging on by matching rights.

KARACHI: The bid submitted by Oil and Gas Development Company (OGDCL) and Pakistan Petroleum Limited (PPL) for acquiring British Petroleum’s Pakistan assets was significantly lower than those submitted by other parties, well-placed sources in the petroleum ministry said.

“OGDCL and PPL have lost their joint bid for the acquisition of British Petroleum’s (BP) assets,” a petroleum ministry official said.

The official dispelled the assertion that the government would intervene for the renegotiation of the asset’s sale, saying that “this is a closed matter.” However the official cited matching rights for the companies, saying that “they can still acquire those fields and assets on which they have matching rights if either of the companies decides to match the highest bids received by BP.”

The official said that the names of other parties that took part in the bid have not been shared by BP as yet.

Analysts had perceived this deal to be of relatively more importance for PPL, as the output from the company’s mainstay Sui gas field has been steadily declining. InvestCap analyst Nauman Khan pointed out that PPL has no matching rights over BP assets, asserting that the rejection of the joint bid seems to have put an end to the company’s hopes of acquiring these assets.

Khan added that “there are 18 fields where OGDCL has matching rights ranging from approximately 15 to 49 per cent.”

BP announced its decision to sell its upstream assets in the country back in July this year. UBS analysts estimated in a July research note that BP’s fields in Pakistan are worth $690 million.

Published in The Express Tribune, December 14^th, 2010.