Pakistan Petroleum Limited (PPL) and Oil & Gas Development Company Limited (OGDCL) have entered into a non-binding framework agreement for the restart of the Reko Diq project with the federal government, the Balochistan government, Government Holdings (Private) Limited (GHPL), and Barrick Gold Corporation (Barrick).
The Pakistan Stock Exchange (PSX) was informed of the news by PPL and OGDCL on Monday, and both companies issued a similar announcement.
The declaration comes after the Pakistani government and provincial government of Balochistan inked a new deal with Canada’s Barrick Gold Corporation on Sunday for the mining of gold and copper deposits from Reko Diq.
Representatives of the federal and Balochistan governments signed a new agreement with a delegation of Barrick Gold headed by Chief Executive Dr Mark Bristow. According to the terms of the new deal, Barrick Gold will reactivate and develop the Reko Diq project in collaboration with Pakistani businesses. In this new venture, Barrick Gold will have a 50 percent stake, while Pakistan’s federal and provincial governments will each retain a 50 percent stake.
In the Framework Agreement, the Company has in principle committed to participate in 8.33% equity (which may be held through onshore or offshore holding companies) together with OGDCL and GHPL, in aggregate equating to 25% equity in the project distributed equally between the Company, OGDCL, and GHPL.
PPL said that it has committed to helping the federal government fulfil its financial responsibilities for the historic Reko Diq dispute in accordance with orders given by the Federal Cabinet.
“The company’s participation in the Project is subject to a number of conditions precedent, including receipt of internal and corporate approvals, regulatory approvals, the execution of definitive long form agreements, and the satisfaction of other conditions precedent set forth in the Framework Agreement.
Legislative and judicial validation would be required to ratify and approve definitive agreements, including the stability of the budgetary system according to the mining deal. The state-owned entities had also hired competent financial, technical, legal, and tax specialists to assist them with the transaction, “according to the announcement.