KARACHI: The Pakistan government is likely to issue $500 million bonds in Oil and Gas Development Co., the country's biggest oil and gas explorer, in foreign stock markets in September,said an official of Ministry of Petroleum, media reported on Thursday.
The government had been planning to issue the OGDC bonds in June in a bid to reduce debt due to non-payment of bills. But an advisory consortium comprising Citibank, JP Morgan, Credit Suisse and BMA Capital recommended it delay the issue due to global financial conditions at the time.
The consortium has now advised the government to go ahead with the sale in September, the official said. The issue is part of a broader plan to sell bonds totalling $2 billion over the next two years.
State-run companies such as refineries and gas companies owe OGDC around Pakistan Rupees 125 billion ($1.44 billion).
Pakistan's oil and gas sector has been caught in a spiral of circular debt since mid-2008, with state-owned utilities defaulting on payments to gas distribution companies, which in turn are then unable to pay OGDC for the gas they have purchased OGDC has interests in 76 fields in Pakistan, of which it wholly owns and operates 42.
The rest are joint ventures with which various foreign and local companies. As of June 2010, it held 47% of the country's recoverable oil reserves and 36% of its recoverable gas reserves, and produced 56% of Pakistan's oil output and 23% of its gas output, the company said in its most recent annual report.
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