Thursday, February 14, 2008

Dodgy Dealings, Dodgier Reporting

The Associated Press of Pakistan reports that a group of Canadian and American investors met with the caretaker Prime Minister and presented a proposal to invest 200 Billion U.S. Dollars. Yes, that's right, 200 BILLION Dollars! The report, however, conspicuously failed to divulge the identity of these investors. The report though did state that the CEO of another Canadian company Cathay Oil and Gas made a presentation on their soon to be launched program.

The figure quoted by the APP report had me intrigued so I decided to do some basic online digging. I wiki'd Cathay Oil and Gas but there was no entry. I then Googled the company in order to locate the official company website, but none was to be found. The Google results were however quite surprising. All, bar one, references to the company were from Pakistani sources detailing Pakistani deals. The only exception this report of a Letter of Intent signed by Cathay for a proposed $ 600 Million Joint Venture in China. The Pakistani websites that mention Cathay includes the official website of President Musharraf.

Now I'm no expert on Oil and Gas exploration, and I presume its a cloak and dagger world, but shouldn't a company that has been awarded exclusive rights over exploring coal reserves in Sindh, (requiring a $250 Million initial investment and total capital outlay expected at $5 Billion), at least have a website, or, barring that, some evidence of prior experience? Ok, so maybe it's an an up and coming company. But should the government really place a large scale project under its care? Especially when Hydrocarbon Online reports that Cathay will begin work after it receives funding, meaning thereby that Cathay has no money of its own nor has had it lined up any other investors! Best of all, as reported here, Cathay's email address is: . That's right, a company with exclusive exploration rights in Pakistan, reportedly investing billions of dollars has a hotmail ID. Even my law firm doesn't use Hotmail, as it doesn't provide adequate protection. Can someone please teach our government officials how to use the internet because I just have a feeling that a Canadian's laughed his way to the bank.

The failure of the government to name even a single renowned company as part of the foreign delegation leads me to believe that the Pakistani energy sector is not large enough to warrant a look by serious players. This exposes the government's bold statements about the 200 Billion Dollar investment in the sector and Pakistan's supposed energy self reliance as blatant lies. On the other hand, perhaps Billions will be invested but the choice of unheralded exploration and extraction companies means that someone in the government made a killing through the award of these contracts.

Perhaps the new kid on the print block, AAJ KAL, is getting set to carry an exposé on this topic! Perhaps Dawn News will have its heavily (fake) accented presenter wag an accusatory finger at the powers to be, (someone's been watching Jeremy Paxman) without launching into an innane monologue (someone should really watch more Jeremy Paxman). Perhaps GEO and AAJ will not get distracted by the 10.45 Kidco time check. Not a chance.

What we we get is this retarded investigative report from Business Recorder :

$250 million or $200 billion? Cathay Oil team calls on Sindh chief minister

KARACHI (February 12 2008): According to Associated Press of Pakistan (APP), a team of Cathay Oil Group of Canada and USA, led by Executive Chairman Robert Miller, called on caretaker Sindh Chief Minister former Justice Abdul Qadir Halepota at Chief Minister House here Monday.The team gave a detailed presentation about their dollar 250 million (however, the amount was $200billion in the APP report appeared in Business Recorder on Monday) power generation, coal mining and oil exploration project. Cathay Oil Company and Sindh Coal Authority had signed a MoU in January 2006 at Chief Minister House and the project was unnecessarily facing a delay.

Note to the Genius Sub Editors of Business Recorder: The APP report clearly states that their were two meetings held with the care taker Prime Minister and not the Chief Minister. One with a group of investors regarding the $200 Billion investment and one with a Cathay Oil delegation regarding their project. The President's own website reports in 2006 a figure of $200 Million, so I'm guessing the cost has now climbed to $250 Million. Interestingly the Sindh Budget only mentions an investment of $50 Million. As for the meeting with the Sindh Chief Ministeras per this report, this report, and this report that took place in 2006!

The Business Recorder instead of carrying this dumb piece should be asking the following questions: "Who were these secret investors?," "Is it ethical for a care-taker government to award multi-billion dollar contracts for exploration of vital energy resources?" "Why does a company capable of investing billions of dollars in the vital and highly competitive energy sector have a hotmail email address?" "And why does the Sindh Budget for 2007-2008 only mention a figure of $50 Million?"


Anonymous said...

Perhaps the Billion was just a typo, and they meant million all along.

And if one were to split the 250mn between the federal and sindh state govt budgets - 200mn vs. 50 mn...would that explain some of the numbers being tossed around?

Anonymous said...

AKS, this really is curious. I work in Oil & Gas banking so I checked our company register for Canada and the firm just doesnt exist. Yet when I checked our media database it turned up a couple of articles from reputable sources(Upstream is a leading O&G newsfeed we get daily).

1 October 2007
The Oil and Gas Journal
Volume 105; Issue 37; ISSN: 00301388
© 2007 The Oil and Gas Journal. Provided by ProQuest Information and Learning. All Rights Reserved.


Cathay Oil & Gas Ltd., Toronto, plans to explore for and develop coalbed methane and oil and gas in Sindh Province, Pakistan.
The company plans to create a basinwide geological model for CBM and a countrywide geological model for oil, gas, and minerals. Cathay signed an operational alliance with Schlumberger that will serve as the basis for a definitive master services agreement for the needed project management and related services.

Cathay coup
103 words
7 September 2007
(c) 2007, Upstream.
Do note that all Upstream articles are protected by copyright. Any unauthorised reproduction is strictly prohibited.

Canadian independent Cathay Oil & Gas has finalised a deal giving it exclusive rights to coalbed methane resources in Pakistan's Sindh province
This exclusive right to explore and develop CBM and water resources in Sindh runs for six years.
The US Geological Survey puts the province's in-place coal reserves at more than 175 billion tonnes, or more than 10% of the global total, the company said. The coals are an extension of those in India's Cambay basin.

Really doesn't make sense to me. You think the figure could have been a mistake of dollars vs rupees ($50m to Rs 200 bn/mn)?


Ahsan said...

well regardless of this all, they shoukd change to gmail. better spam filter.

NB said...

Watch your back AKS. Dodgy dealers with hotmail addresses dont like nosy whistle blowing bloggers. I predict this will end in a high speed car chase with Kim Basinger and Gerard Depardui. Your part will be played by Don Cheadle.

AKS said...

@ Anon

The split between Federal and Provincial might explain the Budget discrepancy but it doesn't clarify the situation at all.

There are two different deals happening here. One with cathay for $250 Million for Methane stuff in Sindh. The other with a group of unnamed investors for the entire country worth a reported $200 Billion.

@ Adeel

Thanks for the inside info.

Perhaps the report misquoted rupees as dollar, in wihch case the deal with the unnamed investors would be worth $3.3Billion. Now that seems a more realistic figure, but it's still large enough for me to question who these investors were.

Secondly, the govrenment has stated that this deal will allow Pakistan to meet ALL its energy needs. That just can't be. $3.3 Billion is just not large enough a number to justify those claims.

@ NB

Kim Bassinger and Gerard Depardieu? We aren't living in the 80's anymore man! And I'd always imagined myself to be played by Will Smith.

Ahsan said...

forget will smith, i think AKS should be played by the guy who played carlton on fresh prince.

Anonymous said...

This is critical issue. While doing research on this deal i found your blog link. Front page news has published on daily jang dated 26-2-2008. Following is the link. Please do whatever u can to bring this to the world, i have done Coal bed methane reserves research if figures mentioned in the news is true it will be the biggest scam of our national history.

Please forward this blog link to all the columnist to national newspapers with the reference news link.

Take some pain may it is Multi billion dollar scam.