Oracle Power notes high-level meetings over Thar desert projects

Oracle Power updated the market on a meeting held in Karachi, Pakistan on 21 February on Tuesday, where the chief minister of the province of Sindh, Syed Murad Ali Shah, met with the chairman of the China-Pakistan Economic Corridor (CPEC) authority, Lieutenant General Asim Saleem Bajwa.

The AIM-traded firm said the meeting was held to discuss several CPEC-related projects, including Oracle's Thar Block VI, and followed on from a recent meeting between Oracle chief executive officer Naheed Memon and the CPEC chairman on 10 February.

It said the meeting included “significant” discussions over the proposed development of a 105 kilometre railway from Chhor to the Islamkot line, to pass through the Thar desert, which would enable access to Pakistan's rail network to transport coal from the Thar coalfields upcountry.

That, Oracle said, would open up additional potential customers across the country, complementing its proposed mine mouth power plant.

The proposed development of Block VI should play a “significant” role with respect to Pakistan's energy security, the firm said.

In addition, the potential of coal gasification into fertiliser projects, and coal to liquids, was paramount to addressing food security issues and reducing fuel imports into Pakistan.

Oracle said the positive developments followed the announcement on 19 February of the signing of the consortium agreement between the company, the China National Coal Development Company, and the private office of His Highness Sheikh Ahmed Bin Dalmook Juma Al Maktoum, under which the development of a lignite coal mine in Thar Block VI would be progressed.

The firm said a high-level visit to Pakistan from Chinese officials was expected in mid-2020, with the progression of CPEC-Thar projects expected to be an important part of the agenda for that visit.

It noted from press comment in Pakistan that Beijing was understood to have requested that the 10th Joint Coordination Committee convened earlier than the previously scheduled in June and July 2020.

The committee forms the government-to-government meetings between Pakistan and China to discuss CPEC projects, it explained, of which Block VI remained on the priority list.

“The strategic importance of the Thar Block, in both a domestic and international capacity, is clearly demonstrated through these encouraging bi-lateral conversations,” said chief executive officer Naheed Memon.

“Furthermore, the assistance from CPEC, together with the support that we have received from our partners and investors, as evidenced by the recent consortium agreement signed between Oracle, China Coal and the private office of His Highness, who is also a shareholder in the company and recently elected to lock-up his shareholding for one year, underpins the positive position that Oracle is in to achieve its operational objectives.”

Memon said Block VI, situated within the broader Thar desert which houses the sixth largest lignite resource globally with more than 175 billion tonnes, had the potential to be one of Pakistan's most valuable assets if developed to be used for power, gas, liquid and for domestic and regional sale to industry.

“We are pleased to be making real progress with the backing of these prominent and globally influential international groups.”

At 0950 GMT, shares in Oracle Power were down 4.76% at 1p.