Jordan backs out of Petra Drilling privatization
The Jordanian government recently decided to halt the privatization of the Petra Drilling Company (PDC), scheduled for October 2002. The Executive Privatization Unit (EPU) announced that instead, the company would be merged with the National Petroleum Company (NPC), reported the official news agency, Petra.
"The Prime Ministry will study the possibility of privatizing the company which will come out after the merger," EPU sources told the Jordan Times.
In October 1995, the country set up the state-owned National Petroleum Co. (NPC) to handle upstream oil and gas exploration and development. In mid-1999, NPC divested its oil-drilling operation, which was slated for privatization, and handed it over to the newly established Petra Drilling Company. NPC is still active in the natural gas sector.
PDC is an affiliate of the Natural Resources Authority (NRA), which was established in 1998 in a bid to promote exploration and attract foreign investment to Jordan. PDC owns and operates three drilling and work-over rigs.
Established with a capital of 6.6 million Jordanian dinars ($9.3 million), the state-owned PDC now offers drilling services for companies, which search for phosphate, oil, gas, water and other mineral resources in the Kingdom.
Jordan embarked on a five-year privatization scheme in 1999. Priorities of implementation were in energy, transportation, communications, water, media, government shareholding companies and official public institutions. Between 1998 and today, the government sold all or part of seven major state-owned enterprises. After a surge of progress during 2000, sales of state assets have slowed in 2001.
Regional conflicts are a contributing factor to the halt on privatization. The escalation of tension in the West Bank and Gaza has made investors wary. The enterprises themselves are also to blame for the slowdown. Many are burdened with inflated payrolls, poor management and heavy debts. — (menareport.com)
© 2001 Mena Report (www.menareport.com)