Pakistani Consortium to Invest $400 Million in Abu Dhabi

A consortium of four Pakistani state-owned companies will invest $400 million to set up a company in Abu Dhabi.

These companies are Oil and Gas Development Company Limited, Pakistan Petroleum Ltd., Mari Petroleum Company Ltd., and Government Holding (Private) Ltd. that will impart 25% share or $100 million each as part of the consortium in the Special Purpose Vehicle, the NewCo.

Special Purpose Vehicles (SPVs) are passive holding companies established for the purpose of isolating financial and legal risk by ring-fencing certain assets and liabilities.

In this regard, the board of directors at Oil and Gas Development Company Limited (OGDCL) has taken the lead and approved its agreed investment share for the period of five years, according to the stock filing released recently.

Accordingly, the consortium has submitted a bid for one of the blocks offered in the Abu Dhabi Bid Round 2019.

Each partner will have a 25% stake in the special purpose vehicle. They have committed a combined investment of up to $400 million over five years.

Besides a share of investment, the consortium is required to provide a parent company guarantee for all obligations for the NewCo under the definitive agreements to Abu Dhabi National Oil Company and Supreme Council for Finance and Economic Affairs (SCFEA).

The final approval will be awarded by the Supreme Council for Finance and Economic Affairs (SCFEA) of the Emirate of Abu Dhabi, and no decision has been made in this regard has so far. In case the block is not awarded to the Pakistani consortium, NewCo shall be dissolved.

According to Abu Dhabi National Oil Company, five blocks have been announced for commercially competitive bidding in this 2019 round, three of which are offshore and two are onshore.

Based on existing data from detailed petroleum system studies, seismic surveys, log files, and core samples from appraisal wells, estimates suggest these new blocks could hold multiple billion barrels of oil and multiple trillion cubic feet of natural gas.

Some of the blocks already have discoveries, and within the combined area there are 290 targeted reservoirs from 92 prospects and leads. In addition to the country’s conventional potential, one of the offered blocks is expected to contain significant unconventional resources.



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