KEEN INTEREST RECEIVED IN THE PRIVATISATION PROCESS OF PSO

Islamabad, January 3, 2007

The Privatisation Commission (PC) has received keen interest from several reputable parties in response to the recent re-advertisement for proposed sale of 51 % shares of Pakistan State Oil (PSO) with management control indicating the confidence of investors in the continued strength and performance of the Pakistan economy in general and PSO in particular.

PSO is the largest oil marketing company in Pakistan and is engaged in the storage, distribution and marketing of petroleum products. Currently PSO has approximately 3,700 retail outlets spread across the country. With an addition of 209 leased retail outlets, the New Vision network expanded to 1,459 across the country. For the year ending June 2006, sales revenue was in excess of Rs. 352 billion (US $5.8 billion) and after tax profits amounted to Rs. 7.5 billion (US $123 million). PSO is listed on all three stock exchanges in Pakistan, and recipient of the Karachi Stock Exchange Top 25 Companies Award for 18 consecutive years. PSO is rated as “AAA” (Triple A) company by Pakistan Credit Rating Agency (PACRA).

Parties and groups who have submitted their Statement of Qualifications (SOQs) and / or reaffirmed their continuing interest, by the due date of 15th January 2007, to participate in the privatization process of PSO include Abraaj Capital, UAE, Abu Dhabi Group,UAE, Al-Ghurair Investment, UAE, Consortium of Aljomaih Group Saudi Arabia and Noor Financial Investment, Kuwait and National Industries Group, Bakri International Energy Systems and Dabbagh Group Holding, Saudi Arabia, Goldman Sachs (Asia) Finance, Vitol S.A (Switzerland) and MCB Bank, Fauji Foundation, Attock Group of companies and Kohinoor Group led by Kohinoor Textiles from Pakistan. In addition some other parties who indicated their interest but did not submit their SOQ, including the PSO employee group

It may be recalled that last year Expressions of Interest (“EOI”) were earlier invited from parties interested in acquiring the indicated shareholding and management control in PSO, resulting in the receipt of EOIs from various investors. Those parties who subsequently submitted their Statements of Qualifications (“SOQ”) in response to the Request for Statement of Qualifications (“RSOQ”) were allowed to conduct due diligence and provided the draft transaction documents. Such parties who had already submitted an EOI along with the requisite processing fee in response to the earlier advertisement were not required to submit a fresh EOI. However, they were asked to update any outstanding information / completed SOQ by 15th January 2007. Given the keen interest indicated by investors another opportunity was given to new investors to join the process. Parties joining the process at this stage would have to work under a tight schedule as the transaction formalities have been nearly completed with bidding targeted for March 2007.