ZAHID ASSURES POTENTIAL BIDDERS OF PAKISTAN STATE OIL (PSO) TO RESOLVE ISSUES PRIOR TO BIDDING

Islamabad, June 20, 2007

A pre-bid meeting to respond to queries of potential bidders relating to the privatisation of Pakistan State Oil (PSO) and to create better understanding regarding the bidding process was held here today under the Chairmanship of Mr. Zahid Hamid, Federal Minister for Privatisation & Investment.

Addressing the pre-bid moot, Mr. Zahid Hamid pointed out that latest figures showed continued upsurge in foreign investment which had reached $ 6.3 billion in the 11 months ending May 2007 which represented a 50% increase over the corresponding period last year. He said that this investment was coming from all over the world and in every sector including the oil and gas sector. In this sector, there had been a revolution in the retail oil distribution business, with increasing emphasis on service quality and modernization of retail outlets. The sector will receive a tremendous boost with the privatisation of PSO.

Mr. Zahid Hamid appreciated the keep interest displayed by all the pre-qualified parties and assured them that all issues pertaining to the transaction would be resolved expeditiously and bidding would be held in consultation with them.

In their comments, representatives of the pre-qualified consortia unanimously requested for fixing the bidding date after resolution of all issues so that they had sufficient time to make arrangements to participate in the bidding. It was agreed that PC would announce a final date shortly, keeping in view the request of the intending bidders.

Representatives of PSO management, Ministry of Finance, Ministry of Petroleum & Natural Resources and PC officials were present during the meeting.

The Government of Pakistan (“GoP”) holds approximately 54% stake in Pakistan State Oil Company Limited (“PSO”) including both direct holdings of the Federal Government and indirect holdings through GoP owned institutions. The Privatisation Commission (“PC”), on behalf of the GoP, intends to sell a 51% equity stake in PSO together with management control to a qualified strategic investor. J.P. Morgan is assisting GoP as the Financial Advisor for the privatisation of PSO.