Pakistan Petroleum : Material Information - Reconstitution of the Reko Diq Project
March 21, 2022 at 12:28 am EDT
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Our reference: CS/PSX-0056
Your reference:
Date: 21st March 2022
Ms. Asmaa Saleem Malik
Deputy General Manager
Listing Department
Pakistan Stock Exchange Limited
PSX Building, PSX Road
Karachi
Dear Madam,
Re: Reconstitution of the Reko Diq Project
In accordance with the Securities Act, 2015 and the Rule Book of the Pakistan Stock Exchange, it is hereby conveyed that the Board of Directors of the Company has, on the basis of directions issued by the Federal Cabinet, resolved to enter into a non- binding framework agreement (Framework Agreement) with: The President of the Islamic Republic of Pakistan on behalf of the Islamic Republic of Pakistan, the Governor of Balochistan on behalf of the Province of Balochistan, Oil & Gas Development Company Limited (OGDCL), Government Holdings (Private) Limited (GHPL) and Barrick Gold Corporation (Barrick), which sets out, inter alia, the ownership/transaction structure, rights, obligations and common objectives of the parties towards facilitating the implementation of the reconstitution of a joint mining project at Reko Diq (the "Project"), on an expedited basis. Through the Framework Agreement, the Company has, in principle, agreed to participate in 8.33% equity (which may be held through onshore or offshore holding companies) along with OGDCL and GHPL, in aggregate amounting to 25% of equity in the Project divided equally amongst the Company, OGDCL and GHPL (the "State Owned Entities"). 50% of the equity will be held by Barrick who shall also have management and operator rights. Remaining 25% of the equity will be held by the Government of Balochistan directly and/or through any of its owned entity, out of which 10% shall be free carry of the Government of Balochistan. To the extent of agreed initial entry fee amounting to $187.5 million attributable to the Company, the Company has, on the basis of directions issued by the Federal Cabinet, agreed to support the Government of Pakistan (through cash collateral, contribution of funds or availing such other funded or unfunded facilities) with respect to payment obligations of the Government of Pakistan for settlement of the historic Reko Diq dispute. The Company's participation in the Project remains subject to, inter alia, receipt of internal and corporate approvals, regulatory approvals, execution of definitive long form agreements and other conditions precedent stated in the Framework Agreement. The process to finalize and approve definitive agreements, including the stabilization of the fiscal regime pursuant to the mineral agreement, would involve legislative and judicial validation. The State Owned Entities had also engaged reputable financial, technical, legal and tax consultants to advise on the transaction.
Pakistan Petroleum Limited
The Company shall continue to notify the Pakistan Stock Exchange / Securities & Exchange Commission of Pakistan of any material information or developments that may arise with respect to the Company's participation in the Project.
The foregoing information may be disseminated to your members.
Pakistan Petroleum Limited published this content on 21 March 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 March 2022 04:27:02 UTC.
Pakistan Petroleum Limited is a Pakistan-based company that is engaged in exploration, development and production of oil and natural gas resources. The Company's exploration and production portfolio is spread across Pakistan with an international presence in the United Arab Emirates (UAE) and Yemen. It also holds mineral rights in Balochistan through Bolan Mining Enterprises, which is a 50:50 joint operation between the Company and Government of Balochistan. It has a portfolio of around 50 exploration assets of which the Company operates 29, including an offshore Block 5 in Abu Dhabi, UAE while 21 blocks, comprising an onshore concession in Yemen, are operated by joint venture partners. It operates around 16 producing fields across the country at Sui, Adhi, Kandhkot, Chachar, Mazarani, Adam, Adam West, Shadadpur, Shahdadpur West, Shahdadpur East, Zafir, Fazal, Kabir, Hadaf, Dhok Sultan and Benari and holds working interest in 24 partner-operated producing fields, including Qadirpur.