20000418

Holding co to be set up

for petroleum

exploration

TAHIR DHINDSA

ISLAMABAD: The government has decided to create a holding company with a paid up capital of Rs 250 million in petroleum sector, so that it could help streamline petroleum exploration work in the country, official sources told Business Recorder.

The company will be operating independently of Director-General, Petroleum Concession (DGPC) who, at present, is dealing with all such matters relating to investments and their returns. The Cabinet has approved the proposal, which will very soon go into its implementation.

It would be a revolving fund, sources said. And, therefore, it would be kept at its starting level of Rs 250 million.

In concessions given to different petroleum companies, the government looks after its liabilities through the arrangement under DGPC office. Now, when the fund (holding company) is being created it would be made independent and all investments will initially be catered through it.

Later on, the investment would be recovered through the sale proceeds of the projects. The returns would be deposited back in the fund, so that it could be kept at its initial size of RS 250 million for further investments.

The government believes that the country has a vast potential for petroleum exploration and the fund would help increase its activity.

As the facility is being fully funded by government money it would not be a grant and, for all profits and losses, the government alone would be responsible.

The proposal was approved some time back by the Economic Coordination Committee and later on by the Cabinet, but it was kept dormant for some reasons.