REG - Oil and Gas Devt Co - Increase in Committed Expenditure Reko Diq Project

Oil And Gas Development CoAnnouncement

19/08/2025 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250819:nRSS8441Va&default-theme=true

RNS Number : 8441V  Oil and Gas Development Company Ltd  19 August 2025

   OIL & GAS DEVELOPMENT COMPANY LIMITED

   (BOARD SECRETARIAT)

CS04-08 (PSX/LSE/SECP)

August 19, 2025

 The General Manager,                                        London Stock Exchange Plc.,

 Pakistan Stock Exchange Limited, Stock Exchange Building,   10 Paternoster Square,

 Stock Exchange Road,                                        London EC4M 7LS.

 Karachi                                                     Tel: (44) 20 7334 8907

 

Subject:        Increase in Committed Expenditure and Approval of
Relevant Project Financing Agreements for the Reko Diq Project

 

Oil and Gas Development Company Limited (the Company) holds an 8.33% stake in
the Reko Diq copper and gold project (the Project) which, when aggregated with
the 8.33% stakes held by each of Pakistan Petroleum Limited and Government
Holdings (Private) Limited, comprises a collective 25% interest in the Project
that is owned by the three Pakistani State-Owned Enterprises (SOEs). The SOEs'
interest in the project company, i.e., Reko Diq Mining Company (Private)
Limited (RDMC), is held indirectly via Pakistan Minerals (Private) Limited.
25% of the shares in RDMC are held by the Government of Balochistan (15% on a
fully funded basis, which is held indirectly through Balochistan Mineral
Resources Limited, and 10% on a free carried basis which is held directly by
the Government of Balochistan). The remaining 50% of the shares in RDMC are
held (indirectly) by Barrick Mining Corporation (formerly Barrick Gold
Corporation), which is the operator of the Project.

 

Based on the updated feasibility study of the Project, the Board of Directors
of the Company, on 25(th) March 2025, approved the Company's pro-rata funding
commitment, including project financing costs, of USD 627 million (subject to
adjustment for actual financing costs and inflation). The Board also granted
in-principle approval to obtain project financing. At the time of the Board's
approval and after accounting for the project financing expected to be
obtained by RDMC, the Company's expected shareholder contributions were equal
to USD 349 million. These approvals were granted contingent upon necessary
shareholders' and regulatory approvals.

 

Since the aforementioned approval, the negotiations with the lenders of the
project financing have considerably advanced. Furthermore, the Phase 1
development cost of the Project has been revised, mainly on account of
conservatism built in on the recommendation of the Independent Technical
Consultant of the lenders with respect to the delay in commencement of
production by six months to 2029 compared with the earlier plan of 2028 and
other cost contingencies. Additionally, financing costs have been increased
due to revision in pricing and the rise in the level of project financing to
USD 3,500 million from the previous estimate of USD 3,000 million. The Project
remains economically viable based on the revised assumptions. Accordingly, on
18(th) August 2025 the Board of Directors of the Company approved an increase
in the Company's pro-rata funding commitment for Phase 1 of the Project,
including project financing costs, to USD 715 million (subject to adjustment
for actual financing costs and inflation). After accounting for the project
financing expected to be obtained by RDMC, the Company's expected shareholder
contributions equal USD 391 million.

 

In connection with the project financing to be obtained by RDMC, the Board of
Directors has also approved execution of the following agreements by the
Company, as well as other ancillary agreements and documents that may be
necessary: (i) the SOE Completion Agreement; and (ii) the Transfer
Restrictions Agreement. The SOE Completion Agreement provides for a collective
guarantee, on a joint and several guarantee basis, from the SOEs of their pro
rata contributory share (which is equal to 27.7778%) of the secured debt
obligation of RDMC under the project financing. The guarantee is to remain
effective until the Project achieves financial completion, i.e., the date on
which the Project satisfies certain criteria to demonstrate a requisite level
of commercial operations. The Transfer Restrictions Agreement provides for,
amongst other things, minimum shareholding requirements for the Project's
sponsors (including each of the SOEs), before and after financial completion,
until the project debt has been fully repaid.

 

The above-mentioned approvals are subject to shareholders' and regulatory
approvals in accordance with law.

 

This disclosure is being made pursuant to Section 96 of the Securities Act,
2015 and Clause 5.6.1(a) of the Pakistan Stock Exchange Regulations, as it
contains material and price-sensitive information. It is intended to ensure
fair, timely, and transparent dissemination of such information in accordance
with applicable laws and regulations among your members.

 

 

Yours sincerely,

 

 

 

 
 
 
(Wasim Ahmad)

 
 Company Secretary

Copy to:

 

Executive Director/HOD,

Offsite-II Department, Supervision Division,

Securities & Exchange Commission of Pakistan, 63, NIC Building,

Jinnah Avenue, Blue Area,

Islamabad.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  MSCEADPNFESSEEA