ISLAMABAD: Pakistan has finally sought intervention from the Malaysian government to stop the exit of its state owned petroleum company Petronas.
An informed source disclosed that the government has sent a letter to the Malaysian government, seeking their help to stop the exit of Petronas. The letter was issued following the Petroleum Ministry’s failure to resolve issues with the Malaysian state owned firm.
The decision to involve Malaysian government was made considering that Malaysia has no Ministry of Petroleum and the friendly Muslim country’s government may not be aware of the actual position and its impact on Pakistan, he added. Petronas had sought a no objection certificate for exit from the Ministry of Petroleum, informing that the company had signed a sale and purchase agreement with the leading European energy company, OMV, selling its entire oil and gas exploration and production assets in Pakistan.
The sale purchase agreement included Mubarak, Mehar and Daphro exploration licenses, while development and production leases of Mehar and Mubarak. The company had sought a total investment of $230 million since 1995. Its total production is estimated at about 20MMSCF of gas and 100 barrels of condensate per day.
However, both the companies had not disclosed the financial details of the acquisition to the Petroleum Ministry. Petronas is the only petroleum company owned by a Muslim country that is operating in Pakistan. Their exit will dampen the country’s image, as it is already striving hard to attract exploration and production companies to accelerate local production to meet rising energy demands.
Malaysia is one of those few countries with which Pakistan has a free trade agreement. Both countries have excellent bilateral relations and intend to further promote trade and investment.
