CDB provides $640 million loan for acquisition of upstream oil and gas assets in Pakistan from BP Pakistan

Project narrative

On July 14, 2011, United Energy Group (Hong Kong) Limited — also known as UEG (HK) — signed a $640,000,000 (HK$4,992,000,000) term facility agreement with the Hong Kong branch of China Development Bank Corporation in order to acquire upstream oil and gas assets in Pakistan from BP Pakistan. The loan carried a 10-year maturity and an interest rate of LIBOR plus a 4.2% margin. United Energy Group Limited, United Energy Pakistan Holdings Limited (“UEPH”), United Energy Pakistan Limited (“UEP”) and Gold Trade International Limited (“GTI”) all served as as guarantors for the loan. The loan fully disbursed in 2011. A $630,000,000 loan disbursement took place in September 2011 for the settlement of the balance payment for the closing of the acquisition of Pakistan assets. Then, in December 2011, the remaining $10,000,000 (approximately HK$78,000,000) was disbursed for general operations in Pakistan. In September 2011, UEP successfully acquired BP Pakistan and all of its upstream oil and gas assets in Pakistan — including four offshore exploration blocks in the Arabian Sea and active production and exploration blocks in Badin, Tando Muhammad Khan, Tando Allahyar, Thatta, Hyderabad (rural), Matiari, Sanghar, Mirpur Khas, and Khairpur districts within the Sindh province — for $775 million. As of 2019, UEP was the largest foreign oil and gas exploration and production (E&P) company in Pakistan. UEP (together with other subsequently acquired Pakistan companies) increased gross production from approximately 25,000 barrels of oil equivalent (“boe”) per day (“boed”) in 2011 to approximately 98,000 boed in 2019. This growth in production resulted in UEP adding approximately 400 million cubic feet per day (“mmscfd”) of new gas into the system, which accounts for approximately 10% of total Pakistan’s indigenous gas production.