KARACHI: Pakistan Petroleum Limited (PPL) has announced signing of an agreement for reconstituted Reko Diq Project.
In a communication shared with the Pakistan Stock Exchange (PSX) on Friday, the company disclosed that PPL, together with Oil and Gas Development Company Limited (OGDCL) and Government Holdings (Private) Limited, collectively the State-Owned Enterprises (SOEs) has signed the Definitive Agreements with respect to the SOEs’ participation in the Reconstituted Reko Diq Project.
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Pursuant to the Definitive Agreements, the Company, alongside 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).
As part of the transaction and implementation plan agreed under the Definitive Agreements, the SOE SPV, ultimately, acquired a 25 per cent stake in the Project from an existing Project stakeholder (“First Stage Acquisition”).
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Consideration for the First Stage Acquisition was paid by each SOE in equal proportion on behalf of the SOE SPV. To this end, the SOEs utilized sums deposited in an interest-bearing, offshore, escrow account – such sums totaled US $562.5 million in addition to accrued interest.
Of such total sums, the Company’s proportional share was USD 187.5 million in addition to the corresponding proportional accrued interest.
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Following completion of the First Stage Acquisition, the SOE SPV’s stake in the Project is restructured through a series of offshore holding companies – the SOE SPV’s, and by extension, the SOEs’ stake in the Project, however, remains unchanged at 25 per cent.
The rights and obligations of the SOEs and the SOE SPV with respect to the Project and inter se the other Project participants are governed by the Definitive Agreements. These rights and obligations relate to, inter alia, management, reporting, funding, and governance.
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